Brexit’s Long-Run Effects on the UK Economy
JOHN VAN REENEN Massachusetts Institute of Technology
This paper from MIT was published in the fall of 2016. For those who have not yet had enough of experts, it explores the issues which cause the financial penalties which we now see looking in front is us.
Van Reenan argues that, compared with remaining in the European Union, there will inevitably be higher trade costs with the rest of Europe, which accounts for about half of all U.K. trade. This will mean lower trade and foreign investment, and thus lower average U.K. incomes. These trade costs will arise from some combination of tariff and non-tariff barriers, and will be larger if there is a “hard Brexit.”