The four panellists at the session, titled ''Brexit?'', offered reasons for the apparent consensus (aside from the number of European economists in the room). Brexiteers argue that by leaving the EU, the UK could regain control over its economic policy, and negotiate a new, better trade deal with Europe.

John Van Reenen (London School of Economics) outlined just how much he thought Brexit would hurt the British economy. Although it would bring some economic gains, in the form of a lower fiscal contribution to the EU (around 0.3% of GDP) and slightly boosted growth from stripping away some regulations, these would not outweigh the economic costs. After accounting for the loss of trade with the EU, lower foreign direct investment and lower immigration, he reckoned that GDP would be between 1.3% and 2.6% of GDP lower (£850 - £1,700 per household in Britain, per year), rising to between 6.3% and 9.5% after accounting for the dynamic effects of Brexit on productivity (Dhingra et al. 2016).

Next, Swati Dhingra (London School of Economics) delved into the detail of the economic costs associated with Brexit. Immigration boosts productivity by allowing workers to sort efficiently into the right jobs (Di Giovanni et al. 2014), and 3 immigrants from the EEA make a positive contribution to the UK public finances (Dustmann and Frattini 2014), so curbs on immigration would be costly. Fears that immigration hurts employment among natives also seem misplaced (Wadsworth 2015). Bruno et al. (2016) found that joining the EU boosted inward flows of FDI by around 20% once a country joined the EU. On the assumption that leaving the EU would reduce them by as much, and combined with estimates from a cross-country growth regression, Dhingra calculated that households would lose out by at least £453 per year on average from the loss of FDI. Dhingra also explored whether Britain would be able to negotiate better trade deals with non-EU trade blocs outside of the EU.

This article was published by VOX on March 30, 2016
Link to article here

Related publications
The Consequences of Brexit for UK Trade and Living Standards, Swati Dhingra, Gianmarco Ottaviano, Thomas Sampson and John Van Reenen, CEP Brexit Analysis No.02, March 2016
Life after Brexit: What are the UK's options outside the European Union?, Swati Dhingra and Thomas Sampson, CEP Brexit Analysis No.01, February 2016

Related links
Swati Dhingra webpage
John Van Reenen webpage
Trade Programme webpage
Growth Programme webpage

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