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Brexit and the Macroeconomic Impact of Trade Policy Uncertainty

Joseph Steinberg ()

No 216, 2017 Meeting Papers from Society for Economic Dynamics

Abstract: The United Kingdom has voted to leave the European Union but the trade policies that will replace E.U. membership are uncertain, and speculation abounds that this uncertainty will harm the U.K. economy until it is resolved. To assess the impact of uncertainty about post-Brexit trade policies, I study a dynamic general equilibrium model with endogenous export participation and uncertainty about whether future U.K.-E.U. trade costs will be high or low. I find that the total welfare cost of Brexit for U.K. households is between £7,000 and £18,000 per person, while uncertainty about Brexit costs less than £45 per person.

Date: 2017
New Economics Papers: this item is included in nep-dge, nep-int and nep-mac
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Journal Article: Brexit and the macroeconomic impact of trade policy uncertainty (2019) Downloads
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More papers in 2017 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
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