THERE is much dispute in the Brexit debate over the economic effects of leaving the EU. Even Brexiteers accept that there would be some short-term costs from uncertainty, but they claim that in the long run Britain could still be better off. Most objective economic studies disagree, finding that there would be long-term costs as well. On April 18th the Treasury weighed in with a 200-page analysis. Its conclusion is that they will be high: the central estimate touted by George Osborne, the chancellor, is that GDP may be 6.2% lower than it would otherwise have been by 2030, an annual cost that he reckons works out at some £4,300 ($6,000) per household. ... The Treasury's numbers are bigger than those in some other recent studies, but that is mainly because they include the dynamic effects on productivity. A similar dynamic study by researchers at the Centre for Economic Performance, London School of Economics (LSE), came up with even bigger losses. To the disgust of Brexiteers, the Treasury agrees with the Bank of England that the benefits of EU membership considerably outweigh the costs. And it dismisses the possibility of a boost from less regulation in a post-Brexit world by pointing out that Britain is relatively lightly regulated already.
This article was published by The Economist on April 18, 2016
Link to article here
Related publications
The impact of Brexit on foreign investment in the UK, Swati Dhingra, Gianmarco Ottaviano, Thomas Sampson and John Van Reenen, CEP Brexit Analysis No.03, April 2016
Life after Brexit : What are the UK's options outside the European Union?, Swati Dhingra and Thomas Sampson, CEP Brexit Analysis No.02, February 2016
The consequences of Brexit for UK trade and living standards, Swati Dhingra, Gianmarco Ottaviano, Thomas Sampson and John Van Reenen, CEP Brexit Analysis No.01, March 2016
Related links
Swati Dhingra webpage
Hanwei Huang webpage
Gianmarco Ottaviano webpage
Thomas Sampson webpage
John Van Reenen webpage
Growth Programme webpage
Trade Programme webpage
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