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Brexit: BGSE Community Analysis

July 7, 2016

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We invite all Barcelona GSE students and alumni to share their early reflections on the potential economic consequences of the UK’s recent vote to leave the EU. Did you focus on a related topic in your master project? Are you working at a think tank, central bank, or consulting firm where your projects will be impacted by this decision? Have you seen any articles or links that you found useful for understanding what lies ahead?

Here are a couple of pieces we’ve found to get the discussion going:

After Brexit: What next for the EMU, EU and UK?
(ADEMU webinar)

The BGSE participates in A Dynamic Economic and Monetary Union (ADEMU), a project of the EU Horizon 2020 Program. Last week, ADEMU researchers held a webinar to discuss the Brexit.

Background:

Europe has grown out of its crises when reason and solidarity have prevailed, but it has also been devastated by its crises when fear and nationalism have taken the lead. Brexit, in the aftermath of the euro crisis, brings this dichotomy back to the foreground. Since 2010 there have been important advances in the development of the Economic and Monetary Union (EMU) and flexible forms of participation have allowed other EU countries, reluctant to join the euro, to share the basic principles that define the EU and have a common presence in the interdependent global world.

According to the panelists, Brexit raises 3 crucial questions:

  1. Should the EMU be accelerated to become a centre of gravity within the EU, or slowed down to avoid a centrifugal diaspora? If accelerated, how?
  2. Should an ‘exit’ country be allowed free entry to the single market and other EU public goods without accepting freedom of movement?
  3. Should the EU remain as it is, or increase its capacity to offer common public services (Banking Union, border security, research funding, environment, etc.), or limit its scope of activity to the EU single and integrated market?

Webinar Panel:
– Joaquín Almunia (Former Vice-President of the European Commission, honorary president of the Barcelona GSE)
– Ramon Marimon (European University Institute and UPF – Barcelona GSE; ADEMU)
– Gorgio Monti (European University Institute; ADEMU)
– Morten Ravn (University College London; ADEMU)

Moderator:
Annika Zorn (European University Institute; Florence School of Banking & Finance)


From Brexit to the Future
(Joseph Stiglitz)

Nobel Laureate and Barcelona GSE Scientific Council member Joseph Stiglitz shares some reflections in the wake of the Brexit decision


What are you thoughts on Brexit?

We want to know what the BGSE community is thinking and reading about the Brexit. Please share your ideas, favorite sources for analysis, or observations from economists you respect in the comments below.

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6 Comments
  1. July 11, 2016 08:49

    Recommended by Angelo Martelli ’11 via Facebook:

    “We economists must face the plain truth that the referendum showed our failings” by Paul Johnson (Institute for Fiscal Studies)
    http://www.ifs.org.uk/publications/8339

    “The referendum has happened and the political landscape has already changed beyond recognition. But the economics have not changed. It should already be plain that the short-term uncertainty is seriously damaging. For the longer term it remains the case that loss of full access to the single market would be economically devastating. We need to keep saying that to the politicians renegotiating our relationship with the EU, and to the public on whose behalf they will be negotiating. And we must say it clearly enough that they, and the public, cannot fail to hear it.”

  2. Jodi Neufeld permalink
    July 12, 2016 07:58

    Here is a post by Tyler Cowen on “The British productivity gap”:

    “I have found that discussions of Brexit would be improved by considering the British productivity gap. Often I hear talk that a Britain set free from EU strictures can pull ahead and overtake those countries, at least in terms of economics. Yet a look at the historical record is sobering.”

    http://marginalrevolution.com/marginalrevolution/2016/07/the-british-productivity-gap.html

  3. Ángelo Gutiérrez permalink
    July 13, 2016 09:02

    Jesús Fernández-Villaverde, from UPenn, is writing a series of entries (in spanish) dissecting the potential implications of Brexit by areas (trade, immigration, productivity and law). Here are the ones he has written so far:

    http://nadaesgratis.es/fernandez-villaverde/brexit-una-vision-diferente-i

    http://nadaesgratis.es/fernandez-villaverde/brexit-una-vision-diferente-ii

    http://nadaesgratis.es/fernandez-villaverde/las-ganancias-del-comercio-internacional-un-intermezzo-en-brexit

    They are interesting and rigorous. I’d recommend them to anyone who wants to read something different from the usual analysis that falls into fatalism or exceptionalism.

  4. Patrick Lavery permalink
    July 13, 2016 09:28

    http://www.newstatesman.com/politics/uk/2016/07/strange-death-liberal-politics

    I thought John Gray’s piece (written before Boris Johnson was forced to pull out of the Conservative Party leadership race) contained a lot of insight, unpleasant though it may be to read for economists and ‘progressives’. I also think that it’s mistaken to try to separate the economics from the other issues involved in Brexit – that kind of separation was part of the reason why Brexit happened.

    A quote from Gray’s piece:

    “The vote for Brexit demonstrates that the rules of politics have changed irreversibly. The stabilisation that seemed to have been achieved following the financial crisis was a sham. The lopsided type of capitalism that exists today is inherently unstable and cannot be democratically legitimated. The error of progressive thinkers in all the main parties was to imagine that the discontent of large sections of the population could be appeased by offering them what was at bottom a continuation of the status quo.”

  5. Max Cologgi permalink
    July 15, 2016 15:23

    Here is an interesting article from voxeu.org on the consequences of Brexit on international trade. A group of international economics researchers react to the predictions of ‘Economists for Brexit’ (2016).

    http://voxeu.org/article/how-economists-brexit-manage-defy-laws-gravity

    ” The ‘Economists for Brexit’ recommend that the UK leaves the EU. Rather than striving for new trade deals, they recommend unilaterally abolishing all trade protection, and predict a subsequent boom of 4%. This rosy forecast stands in sharp contrast with all other economic analysis. This column explains how the modelling on which the group bases its recommendation, from Professor Patrick Minford, fails to grasp basic facts about the nature of international trade and product standards. A more realistic assessment shows that ‘unilateral trade liberalisation’ does very little to offset the steep decline in UK living standards that would follow Brexit. “

  6. August 1, 2016 09:27

    New eBook from VoxEU “regroups the views of more than a dozen leading economists and specialists on a broad range of issues, from various perspectives.” http://voxeu.org/article/new-ebook-brexit-beckons

Comments are closed.