Brexit Uncertainty and Trade Disintegration

Alejandro Graziano, Kyle Handley and Nuno Limão

No 25334, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We estimate the uncertainty effects of preferential trade disagreements. Increases in the probability of Britain’s exit from the European Union (Brexit) reduce bilateral export values and trade participation. These effects are increasing in trade policy risk across products and asymmetric for UK and EU exporters. We estimate that a persistent doubling of the probability of Brexit at the average disagreement tariff of 4.5% lowers EU-UK bilateral export values by 15 log points on average, and more so for EU than UK exporters. Neither believed a trade war was likely.

JEL-codes: E02 F02 F1 F5 (search for similar items in EconPapers)
Date: 2018-12
New Economics Papers: this item is included in nep-eec and nep-int
Note: ITI
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Citations: View citations in EconPapers (37)

Published as Alejandro G Graziano & Kyle Handley & Nuno Limão, 2021. "Brexit Uncertainty and Trade Disintegration," The Economic Journal, vol 131(635), pages 1150-1185.

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Journal Article: Brexit Uncertainty and Trade Disintegration (2021)
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