Brexit Uncertainty and its (Dis)Service Effects

Saad Ahmad, Nuno Limão, Sarah Oliver and Serge Shikher

No 28053, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We estimate the impact of increased policy uncertainty from Brexit on UK trade in services. We apply an uncertainty-augmented gravity equation to UK services trade with the European Union at the industry level from 2016Q1 to 2018Q4. By exploiting the variation in the probability of Brexit from prediction markets interacted with a new trade policy risk measure across service industries we identify a significant negative impact of the threat of Brexit on trade values and participation. The increased probability of Brexit in this period lowered services exports by at least 20 log points.

JEL-codes: F02 F13 F14 L8 (search for similar items in EconPapers)
Date: 2020-11
New Economics Papers: this item is included in nep-eec and nep-int
Note: ITI
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Citations: View citations in EconPapers (7)

Published as Saad Ahmad & Nuno Limão & Sarah Oliver & Serge Shikher, 2023. "Brexit Uncertainty and Its (Dis)Service Effects," American Economic Journal: Economic Policy, vol 15(4), pages 459-485.

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Journal Article: Brexit Uncertainty and Its (Dis)service Effects (2023)
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