The economic consequences of leaving European Union by Great Britain
DOI:
https://doi.org/10.12775/EiP.2018.011Keywords
integration, disintegration, BrexitAbstract
Motivation: In a referendum on June 23, 2016, the British people voted to leave the European Union. No nation state has ever left the EU. The theory and practice of European integration is rich, but scientific studies considering the opposite situation thus far do not exist. So the question of economic consequences caused by Great Britain leaving the European Union is very pertinent.
Aim: The aim of this article is to identify and discuss the direct economic consequences of Great Britain leaving the European Union. The analysis was performed for the United Kingdom and for the European Union. Poland is a part of the EU. Therefore, among the effects on the EU side of the research there is an emphasis on the results for Poland. The effect of budgets, trade and migration has been analyzed.
Results: The effects of the United Kingdom leaving the EU will be more unfavorable for the UK than for the EU. The amount of losses depends on the type of Brexit. A soft Brexit means a relatively slow negotiation designed to retain as close as possible a relationship with the rest of the EU. Access to the EU’s single market will reduce losses due to having as few tariffs as possible. A hard Brexit would mean getting out of the EU quickly, having no institutional or political relationship with the union, and regaining full control of UK borders. Therefore, a negotiated free trade deal with the EU would seem to reduce losses for everyone.
References
Aichele, R., & Felbermayr, G. (2015). Cost and benefits of a United Kingdom exit from the European Union. Retrieved 04.02.2018 from https://www.bertelsmann-stiftung.de.
Albornoz, F., Calvo Pardo, H.,F., Corcos, G., & Ornelas, E. (2012). Sequential exporting. Journal of International Economics, 88(1). doi:10.1016/j.jinteco.2012.02.007.
Armstrong, A., & van de Ven, J. (2016). The impact of possible migration sce-narios after ‘Brexit’ on the state pension system. Economies, 4(4). doi:10.3390/economies4040023.
Barker, A. (2017). The €60 billion Brexit bill: How to disentangle Britain from the EU budget. Retrieved 04.02.2018 from http://www.cer.eu.
Bloom, N., Draca, M., van Reenen, J. (2016). Trade induced technical change? The impact of Chinese imports on innovation, it and productivity. The Review Economic Studies, 83(1). doi:10.1093/restud/rdv039.
Cadestin, C., Gourdon, J., & Kowalski, P. (2016). Participation in Global Value Chains in Latin America: Implications for Trade and Trade Related Policy. OECD Trade Policy Papers, 179. doi:10.1787/5jlpq80ts8f2-en.
Cumming, D., & Zahra, S. (2016). International business and entrepreneur-ship implications of Brexit. British Journal of Management, 27(4). doi:10.1111/1467-8551.12192.
Dhingra, S., Ottaviano, G., Sampson, T., & Van Reenen, J. (2016). The conse-quences of Brexit for UK trade and living standards. Retrieved 04.02.2018 from http://cep.lse.ac.uk.
di Giovanni, J., Levchenko, A., & Ortega, F. (2012). A global view of cross-border migration. Journal of the European Economic Association, 13(1). doi:10.1111/jeea.12110.
Eaton, J., & Kortum, S. (2002). Technology, geography, and trade. Econometri-ca, 70(5). doi:10.1111/1468-0262.00352.
Egger, P., Larch, M., Staub, K.E., & Winkelmann, R. (2011). The trade effects of endogenous preferential trade agreements. American Economic Journal: Economic Policy, 3(3). doi:10.1257/pol.3.3.113.
European Commission. (2017). Joint report from the negotiators of the European Union and the United Kingdom Government on progress during phase 1 of nego-tiations under Article 50 TEU on the United Kingdom’s orderly withdrawal from the European Union. Retrieved 05.02.2018 from https://ec.europa.eu.
European Commission. (2018). Budgets and funding. How much does the UK con-tribute and receive? Retrieved 04.02.2018 from http://europa.eu.
Felbermayr, G., Hiller, S., & Sala, D. (2010). Does immigration boost per capi-ta income? Economics Letters, 107(2). doi:10.1016/j.econlet.2010.01.017.
Global Edge. (2017). Trade Statistics. Retrieved 29.03.2017 from https://globaledge.msu.edu.
Holmes, P., Rollo, J., & Winters, A. (2016). Negotiating the UK’s post-Brexit trade arrangements. National Institute Economic Review, 238(10). doi:10.1177/002795011623800112.
House of Commons. (2013). Leaving the EU. House of Commons Research Paper, 13/42.
Katwala, S., Rutter, J. & Ballinger, S. (2016). What next after Brexit? Immigration and integration in post-referendum Britain. Retrieved 29.03.2017 from http://www.britishfuture.org.
Keep, M. (2018). The UK’s contribution to the EU budget. House of Commons Briefing Paper, 7886.
Kotliński, K. (in press). Skutki Brexitu dla budżetu Unii Europejskiej. Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu.
Krugman, P. (1980). Scale economies, product differentiation, and the pattern of trade. American Economic Review, 70(5).
Kuźnar, A., & Menkes, J. (2017). Will Brexit cause the whole Britain to leave the European Union? Ekonomia i Prawo. Economics and Law, 16(4). doi:10.12775/EiP.2017.030.
Matthews, A. (2016). The potential implications of a Brexit for future EU agri-food policies. EuroChoices, 15(2). doi:10.1111/1746-692X.12128.
Melitz, M. (2003). The impact of trade on intra-industry reallocations and aggregate industry productivity. Econometrica, 71(6). doi:10.1111/1468-0262.00467.
Ottaviano, G., Pessoa, J.P., Sampson, T., & Van Reenen, J. (2014). The costs and benefits of leaving the EU. CFS Working Paper Series, 472. doi:10.2139/ssrn.2506664.
Sampson, T. (2013). Dynamic selection and the new gains from trade with heterogeneous firms. FIW Working Paper, 122.
Sampson, T. (2017). Brexit: the economics of international disintegration. Journal of Economic Perspectives, 31(4). doi:10.1257/jep.31.4.163.
The Migration Observatory. (2017). Migrants in the UK: an overview. Retrieved 29.03.2017 from http://www.migrationobservatory.ox.ac.uk.
Wacziarg, R. (2001). Measuring the dynamic gains from trade. The World Bank Economic Review, 15(3). doi:10.1093/wber/15.3.393.
Downloads
Published
How to Cite
Issue
Section
Stats
Number of views and downloads: 766
Number of citations: 0
