The Economic Impact of Brexit
- Reference: 0180071622
- News link: https://news.slashdot.org/story/25/11/14/080207/the-economic-impact-of-brexit
- Source link:
> This paper examines the impact of the UK's decision to leave the European Union (Brexit) in 2016. Using almost a decade of data since the referendum, we combine simulations based on macro data with estimates derived from micro data collected through our Decision Maker Panel survey. These estimates suggest that by 2025, Brexit had reduced UK GDP by 6% to 8%, with the impact accumulating gradually over time.
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> We estimate that investment was reduced by between 12% and 18%, employment by 3% to 4% and productivity by 3% to 4%. These large negative impacts reflect a combination of elevated uncertainty, reduced demand, diverted management time, and increased misallocation of resources from a protracted Brexit process. Comparing these with contemporary forecasts -- providing a rare macro example to complement the burgeoning micro-literature of social science predictions -- shows that these forecasts were accurate over a 5-year horizon, but they underestimated the impact over a decade.
[1] https://www.nber.org/system/files/working_papers/w34459/w34459.pdf
Thanks for the research data (Score:5, Informative)
I appreciate the UK being a guinea pig and providing more concrete data for future researchers to understand just how bad protectionist acts like Brexit are. While economists could simulate how bad things would be, that would never be as good as studying the real thing.
Unfortunately now my country, the US, will be giving even more data points showing the same thing a decade from now.
Re: (Score:3)
Thankfully most of the crap the US is doing can be rolled back by the next president. If president A can wave his hand one direction, president B can wave it the other way. Most of Trumps crap is temporary. Brexit, on the other hand
Re:Thanks for the research data (Score:4, Insightful)
When the next Democratic president waves their hand you can be sure the Supreme Court will do its duty and say that waving is not part of presidential powers and block whatever it is they want to do.
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Recent Democrat presidents have shown a marked reluctance to roll back weird decisions imposed by their predecessors, while Trump's first term in particular was characterised by a determination to roll back almost everything Obama had done. I may be underestimating the effect of control of the House and Senate there - Biden and Obama had obstacles placed in their way.
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> Recent Democrat presidents have shown a marked reluctance to roll back weird decisions imposed by their predecessors...
You seem to have a short memory. I have a pretty clear memory of Biden's first days in office.
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China signed 20 years Soy contracts with South-American countries, new US presidents can't change that.
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The rest of the world isn't going to forget what Trump did, or the ability of the American people to elect someone like him. It's going to take a long time and a lot of work to rebuild the trust and relationships that existed before, if it is even possible.
The US is seen as politically unstable. Every 4 years there is a good chance that whatever policy was made will be reversed, whatever the priorities were will change.
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Your belief is shared by a lot of my republican-voting family members. I'm skeptical this belief is warranted. I never in my wildest dreams thought it possible the unprecedented and permanent changes Trump has made to the character of the institutions of American government over the last 11 months.
Until now presidents respected and upheld the idea that executive institutions were loyal to the constitution and the country and the president's job was to enact policies that would guide them, and make sure Co
not protectionism on either side (Score:1, Insightful)
Protectionism is when you "protect" a domestic industry e.g. with tariffs. Example - the fine compact pickup trucks sold worldwide can't be sold in the USA due to the chicken tax, fuel economy standards that are LOWER for bigger trucks etc. Solar panels are subject to tariffs to protect the US solar industry.
Trump used tariffs as a way to enrich his cronies (remember when the stock market collapsed earlier this year, and people knowing the tariffs would be rolled back piled in and made huge instant profits?
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Unfortunately this lesson is continually lost on many who push for separation and sovereignty of various kinds. For example those calling for western separation in Canada. Canada as a whole is already a very tiny market with minimal world bargaining power. Yet these geniuses think that a small subset of Canada would somehow have more clout in the world than all of Canada does. Because freedom and oil or something. They are completely delusional. Possibly they think they would join the US which is enti
Re: not protectionism on either side (Score:1)
Does the Easterlin paradox indicate that increasing GDP does not increase happiness? What if feeling free does?
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Brexit was sold as being protectionist, but it was actually the opposite. We gave up huge amounts of sovereignty.
For example, we used to control both sides of our border with France, but Brexit gave up control of the French side and sure enough the boats started coming. The French are not all that interested in policing our border for us, beyond what they can get out of any deals they made with us.
On rule making too, we are now pretty much obliged to accept whatever the EU does, because we are too small to
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"For example, we used to control both sides of our border with France, but Brexit gave up control of the French side and sure enough the boats started coming. The French are not all that interested in policing our border for us, beyond what they can get out of any deals they made with us."
NOBODY can hinder any boats from leaving France, it's not a crime to leave France by ANY means.
The hundreds of millions that the UK pays for French 'patrol-boats' are useless.
Just theater for REFORM voters.
First, their liv
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Recently the French police have started slashing the boats before they set off, on the basis that it's unsafe and they are protecting the occupants.
Really the only way to resolve this issue is to have a proper integrated system to deal with people seeking asylum in Europe, but that would be politically unacceptable in the UK.
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> Every time we diverge from what the EU does, it damages our economy even more.
tbf, eu ruling class had been pretty much fucking up eu's economy as well. i can only speculate about the real reason why the english ruling class would want to press for brexit but there was reason enough to be pissed at the eu. it indeed pushed the uk off the cliff, but the eu for sure will follow suit. my guess is the worst is yet to come.
Re: Thanks for the research data (Score:1)
"The USA and EU have structural deficits that sure look like they must logically lead to collapse."
How long has it looked like Japan should collapse, yet here we are?
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One can also study the Smoot Hawley Tariff Act to see how poorly that went. [1]https://en.wikipedia.org/wiki/... [wikipedia.org]
[1] https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Act
My podiatrist recommends Winchester-brand rifles! (Score:3)
In related news, cutting the links that connect 20% of any telecommunications network and replacing them with cups and strings that you have to rent by the hour degrades performance somewhat, especially in the smaller fraction.
It was all about taking back control (Score:2)
of a slightly shittier country.
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yes, and that's why pretty much all of the leadership in all parties supported that nonsense - because they wanted to be kings.
Depends on what you value (Score:5, Insightful)
I asked Gemini this question:
> what percentage of bills in the uk parliament originated from the EU before brexit
Response:
> Estimates of how much UK legislation originated from the EU vary, but a study by the
> House of Commons Library found that between 1993 and 2014, 13% of UK Acts of Parliament and Statutory Instruments had an EU influence. This figure rises significantly to around 62% if you include non-legislative EU regulations that apply in the UK, notes the BBC.
> The calculation of 13% includes only primary legislation (Acts of Parliament) and secondary legislation (Statutory Instruments) where the EU was the source or influence.
> The 62% figure is based on a broader count that includes all EU-influenced laws, not just UK Acts and Statutory Instruments.
> The impact is also greater in certain sectors like trade, agriculture, and financial services, where EU influence was more substantial
It's hard to call the UK a functioning democratic state when most of what the national assembly does is basically working out laws that implement regulations that originate outside of it.
In any rational debate, Brexit would be understood as voters sacrificing economic gains for sovereignty and a return to Parliament functioning as it traditionally did. Rubber-stamping regulations from the EU or other bodies over 60% of the time its working on legislation is a major deviation from the ancient purpose of Parliament.
Re:Depends on what you value (Score:4, Informative)
The EU was not some foreign law-factory parachuting rules into Britain.
It was a club the UK sat in, voted in, shaped, litigated in and often dominated.
British civil servants and ministers were inside the room writing those regulations.
Calling them “originating outside Parliament” is like claiming London traffic rules “originate outside Westminster” because councils draft them.
The famous “62%” number is particularly sloppy.
It counts every EU regulation that applied in the UK, even when they required no UK legislation at all.
Many were technical standards for products that Britain wanted harmonised so its exporters would not get blocked at 27 borders. Harmonisation is not foreign domination, it is the price of access to a giant market and a shield against other members disadvantaging your firms.
The 13% figure is the one that matters for sovereignty, and even there the point is backwards. Most EU-linked UK laws existed to ensure British rules didn’t hurt citizens and companies in the other 27 states and vice versa.
It was mutual protection, not subordination. Without common rules, you get trade barriers, litigation, and tit-for-tat discrimination. The UK helped design those safeguards to stop France or Germany from tilting the field against British business.
Parliament didn’t “rubber-stamp” anything. It scrutinised, amended, and sometimes dragged its feet. What it didn’t do was recreate 27 separate regulatory regimes every week for no gain. Shared standards aren’t a democratic failure, they’re a tool that prevents chaos.
Brexit didn’t magically restore an ancient purity. It simply swapped shared rule-making for duplication, higher costs, and British firms still following EU rules anyway if they want to sell there.
Sovereignty sounds noble until you realise it can be exercised together or alone, and “alone” is the weaker position.
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The UK also had a veto over most of the rules that the EU introduced. I don't think it ever used it. In fact, in almost every case, the UK voted for the proposed rules. It was something like under 2% that it didn't want, mostly because the EU tends to make sure everyone is happy before even having the vote - you know, how adults agree stuff.
There was a lot of misinformation about EU rules. The classic one is the "bendy banana" rule, which governs the acceptable ripeness of bananas sold there. Much hang wrin
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> The UK also had a veto over most of the rules that the EU introduced. I don't think it ever used it. In fact, in almost every case, the UK voted for the proposed rules. It was something like under 2% that it didn't want, mostly because the EU tends to make sure everyone is happy before even having the vote - you know, how adults agree stuff.
Pretty much. Although for many things the UK didn't have a veto but did very well out of the fact that if there was a disagreement at the "big country level" then it was
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Stop posting AI slop. Why are you doing this? Do you think other people who like AI slop can't ask the same question?
This is clearly wrong! (Score:2)
The correct answer is to Brexit even harder. If the UK keeps Brexiting, and clapping for Tinkerbell, the economy will get better and Europe will be on bended knee to the UK. You'll see!
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Maybe they should tow the island to warmer waters
Re: This is clearly wrong! (Score:2)
They CLEARLY didn't factor in the 360m extra weekly for NHS and all the fish we can get our morons with the big red bus delivered. Plus all the extra trade deals we made with Vanuaty, New Zealand and Eswatini!
Doesn't pass the smell test (Score:3)
If these figures are correct it means Britain would be absolutely booming had it not left the EU, far ahead of virtually all other EU countries. I seriously doubt that would have been the case.
It doesn't take a genius to see (Score:3)
that reducing the size of markets and introducing more barriers to markets creates less economic activity. You buy less from the EU, they buy less from you when you have regulatory barriers. Same thing with Russia, we lost a lot of access to their resources and markets when they went to war. It's to a perfect economic system, there are a lot of drawbacks, but the easier you make it to trade with people the more global efficiency there will be. The thing I'm worried about is China will decide they want their way with Taiwan and make themselves and everybody worse off for it.
Horseshit (Score:2)
It's a goddamn SIMULATION! You can get any result you want with a simulation.
We all knew Brexit would hurt ... (Score:2)
[disclaimer: continental European here] ... but I think it's safe to say that even proud EU citizens are surprised at how the UK seems totally and irreversibly shafted at this point. No gloating here, it's really painful to watch.
[1]Here's a perfect expert analysis of Brexit and it's outsomes in 90 seconds. [youtube.com]
[1] https://www.youtube.com/watch?v=Bex5LyzbbBE
10 years of brexit (Score:2)
Including 4 years where the UK was in the EU + 2 years of COVID
Re:10 years of brexit (Score:5, Informative)
They were careful to separate out the damage done by COVID. While the UK was in the EU for 4 of those years, the damage was done the moment the referendum was decided. The Pound fell hard, investment fell, companies started planning their exit strategies.
Arguably some of the COVID damage can be attributed to Brexit as well. If we hadn't voted for it in 2016, it seems unlikely that Boris Johnson would have become Prime Minister in 2019, and then botched the COVID response so badly. His mismanagement and purging of the last few decent Tories from his party contributed to the economic damage, the deaths, the long term health problems, and of course the massive amount of fraud and theft by members of his party and their friends. Everything from dodgy PPE, to Test & Trace that didn't work.
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companies started planning their exit strategies.
The strategy was so crystal clear, "brexit means brexit" after all, that companies had no idea even what to plan for. The bad ones buried their heads in the sand, the good ones wasted avst amounts of time and money having to cover all reasonable contingencies.
Naturally, in keeping with the entire theme, it wasn't just planning for exit, it was an utter shitshow of trying to plan.
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I know at least three companies that took the opportunity to move as much of their stock and equipment out of the UK, while EU rules were still in place, and then closed up shop here in the UK. Another ended up opening a new facility in Ireland where they re-tested stuff so it could meet EU requirements, as the new British CA mark is pretty much worthless.
Of course it cost them money, but not as much money as they would have lost by staying. And that's with the UK's newly devalued currency making out export
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Speaking of UKCA...
in my line if work is don't think I've had a single UK customer ask about it. CE is still valid here mostly and everyone still asks for CE marking. It's all B2B by the way.
But also since we can get away with just CE, why would we go for just the local one and have to recertify anyway for a bigger market.
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The first four years were pretty easy to forecast, but Covid (along with various idiocies BoJo introduced) was not something people could realistically plan for.
Brexit was not about economics (Score:3)
Brexit was thinly disguised racism.
Most of the reasons people voted in favour of it centered anout keeping coloured people out of the NHS (national health service.)