Results

Blog

LSE Politics and Policy:

Stop performative Brexit and do what works for the British economy

Brexit has left its mark on UK international trade, although, so far, the effect has been smaller than economists expected. Dennis Novy, Thomas Sampson and Catherine Thomas review recent UK trade performance and argue th...Read more...

CEP election analysis

Brexit and UK trade

This briefing summarises the evidence about how leaving the European Union (EU) has affected UK trade. Overall, Brexit has had a negative effect on UK trade. But, so far, this effect has been smaller than economists expe...Read more...

Journal article

American Economic Journal: Microeconomics:

Technology Transfer in Global Value Chains

Global value chains create opportunities for North-South technology diffusion. This paper studies technology transfer in value chains when contracts are incomplete and input production technologies are imperfectly exclud...Read more...

Blog

LSE British Politics and Policy:

Global Britain has failed - what next?

The vision of post-Brexit Britain was one of international trade deals that would propel the country into a new era of prosperity. That vision of "Global Britain" is now dead. Thomas Sampson argues that the only viable a...Read more...

External publication

The state of the UK economy 2024

The state of the UK economy is always an important matter, but it is all the more so in what looks likely to be an election year. This UK in a Changing Europe report takes stock of the UK economy in order to assess how i...Read more...

CEP discussion paper

Trade, innovation and optimal patent protection

This paper provides a first comprehensive quantitative analysis of optimal patent policy in the global economy. We introduce a new framework, which combines trade and growth theory into a tractable tool for quantitative ...Read more...

Journal article

American Economic Review :

Technology gaps, trade and income

This paper quantifies the contribution of technology gaps to international income inequality. I develop an endogenous growth model where cross-country differences in R&D efficiency and cross-industry differences in innov...Read more...

Journal article

Annual Review of Economics:

Expecting Brexit

The Brexit vote precipitated the unraveling of the United Kingdom's membership in the world's deepest economic integration agreement. This article reviews evidence on the realized economic effects of Brexit. The 2016 Bre...Read more...

External publication

The economics of Brexit: what have we learned?

This eBook, produced by VoxEU/CEPR and UK in a Changing Europe, brings together leading academic researchers on trade, immigration and political economy to assess what we have learned, 18 months on from its implementatio...Read more...

Chapter

The impact of Brexit on UK-EU trade

in The Economics of Brexit: What Have We Learned?

Read more...

Blog

VoxTalks Economics:

The economics of Brexit (podcast)

The latest CEPR ebook investigates the impact of Brexit so far on the economies of the UK and EU. Tim Phillips talks to three of the authors: Jonathan Portes, Thomas Sampson and Sarah Hall....Read more...

CentrePiece article

Trade disruptions in the wake of Brexit

A dramatic fall in the value of UK imports from the European Union relative to the rest of the world occurred when the post-Brexit Trade and Cooperation Agreement came into effect. What's more, according to research by R...Read more...

Blog

Centre for European Reform:

Is Brexit to blame for Britain's economic woes? (podcast)

Thomas Sampson, of the London School of Economics, and John Springford, the CER's deputy director, discuss and compare their findings on how Brexit has affected UK goods trade and inflation, and John shares his latest re...Read more...

Blog

LSE Business Review:

Brexit: the major trade disruption came after the UK-EU agreement took effect in 2021

The impact of Brexit on UK trade is a highly contested topic. Rebecca Freeman, Kalina Manova, Thomas Prayer, and Thomas Sampson summarise the findings of new research on how Brexit has affected the UK's goods trade with ...Read more...

CEP discussion paper

UK trade in the wake of Brexit

This paper studies the impact of Brexit on the UK's trade with the EU relative to its trade with the rest of the world. We find no evidence that uncertainty and anticipation effects led to a significant decline in relati...Read more...

Blog

VoxEU:

Import liberalisation as export destruction: evidence from the United States

Holger Breinlich, Elsa Leromain, Dennis Novy and Thomas Sampson look at US-China trade relations to examine how import liberalisation brings down import costs and increases competition, but can also lead to lower export ...Read more...

Blog

Economics Observatory:

How might Scottish independence affect the costs of international trade?

If Scotland were to become an independent country, there would be a new international border with the rest of the UK. Thomas Sampson considers how additional costs that are inevitably created by borders would affect trad...Read more...

Journal article

International Economic Review:

The Brexit vote, inflation and UK living standards

This article studies how voting for Brexit affected living standards in the United Kingdom. Using heterogeneity in exposure to import costs across product groups, we analyze how the depreciation of sterling caused by the...Read more...

CEP discussion paper

Technology transfer in global value chains

Firm-to-firm relationships in global value chains create opportunities for North-South technology diffusion. This paper studies technology transfer in value chains when contracts are incomplete and in-put production tech...Read more...

Blog

UK in a Changing Europe:

Expecting Brexit

Swati Dhingra and Thomas Sampson examine how Brexit impacted UK trade and GDP before being implemented in 2021. Finding evidence that the UK's economy was around two to three per cent smaller at the end of 2019 than it w...Read more...

CEP discussion paper

Expecting Brexit

The Brexit vote precipitated the unravelling of the UK's membership of the world's deepest economic integration agreement. This paper reviews evidence on the realized economic effects of Brexit. The 2016 Brexit referendu...Read more...

CEP Insights

Brexit

The UK's vote to leave the European Union in 2016 triggered economic reactions that will define the country's future for years to come. Why does leaving the EU have such a profound impact - and how do economists estimate...Read more...

CEP discussion paper

Import liberalization as export destruction? Evidence from the United States

How does import protection affect export performance? In trade models with scale economies, import liberalization can reduce an industry's exports by cutting domestic production. We find this export destruction mechanism...Read more...

Journal article

American Economic Review: Insights:

Endogenous Education and Long-Run Factor Shares

We study the determinants of factor shares in a neoclassical environment with capital-skill complementarity and endogenous education. In this environment estimates of the elasticity of substitution between capital and la...Read more...

Blog

UK in a Changing Europe:

Trade after Brexit: the initial numbers

Thomas Sampson argues that, although the full effects of Brexit won't be known for many years, regulatory divergence is likely to further reduce trade, as firms face the challenge of satisfying different regulations in t...Read more...

Blog

Economics Observatory:

What do new UK trade data reveal about the impact of lockdown and Brexit?

Thomas Sampson writes that lockdown probably contributed to the fall in UK exports and imports reported in the January 2021 trade data. But the bigger declines in trade with the European Union than with other countries a...Read more...

Blog

VoxEU:

Disunited Kingdom? Brexit, trade and Scottish independence

The Scottish National Party is calling for a second referendum on independence from the UK. This column examines the likely effect of changes in trade costs resulting from independence and Brexit on the Scottish economy,...Read more...

Blog

UK in a Changing Europe:

Brexit, trade and Scottish independence

Hanwei Huang, Thomas Sampson, and Patrick Schneider analysed the economics of Scottish independence by looking at its impact on trade. Independence would put a new border between Scotland and the rest of the UK, introduc...Read more...

CEP Brexit analysis

Disunited Kingdom? Brexit, trade and Scottish independence

Scotland is a small, open economy that mostly trades with the rest of the UK. There is around six times more trade between Scotland and the rest of the UK than predicted by a standard gravity trade model. Scottish indepe...Read more...

External publication

Brexit and beyond:

Brexit and UK trade: what next?

Brexit is expected to make the UK poorer in the long run compared to remaining an EU member. Although the analysis used to reach this conclusion is complex, most forecasts depend upon the same economic logic. Brexit will...Read more...

Blog

LSE Covid-19:

A no-deal Brexit may still be more costly than Covid-19

Conventional wisdom holds that the impact of COVID-19 on the UK economy dwarfs the potential consequences of Brexit. This has led some Brexiteers to argue there is nothing to fear about a no-deal Brexit. Yet data show th...Read more...

Blog

LSE Brexit:

EU trade is just as important to the UK as it was in 2016. Why?

Has EU trade become less important to the UK since the referendum? Thomas Sampson (LSE) finds it has not. He discusses why this might be the case and whether COVID-19 could be the trigger for more UK firms to permanently...Read more...

Journal article

European Economic Review:

Voting with their money: Brexit and outward investment by UK firms

We study the impact of the 2016 Brexit referendum on UK foreign direct investment. Using the synthetic control method to construct appropriate counterfactuals, we show that by March 2019 the Leave vote had led to a 17% i...Read more...

Blog

LSE British Politics and Policy:

Budget 2020: a bold response to coronavirus, but more must be done if it becomes widespread in the UK

While the 2020 Budget offers an overall adequate response to the challenges currently posed by coronavirus, there are three issues that need to be addressed further, especially as the outbreak becomes more widespread, wr...Read more...

Blog

UK in a Changing Europe:

New chancellor, new challenge: evaluating the coronavirus budget

Thomas Sampson examines the first UK budget to balance the shocks of Covid-19 and Brexit....Read more...

CEP discussion paper

Exchange rates and consumer prices: evidence from Brexit

This paper studies how the depreciation of sterling following the Brexit referendum affected consumer prices in the United Kingdom. Our identification strategy uses input-output linkages to account for heterogeneity in e...Read more...

Blog

LSE Brexit:

Three years on: the UK is paying a high economic price for its decision to leave the EU

How has the Leave vote affected the UK economy, ask Swati Dhingra and Thomas Sampson (LSE) in this second of two blogs based on the CEP Election Analysis briefing on Brexit. It summarizes CEP research on how the referend...Read more...

Blog

LSE Business Review:

Brexit will leave the UK worse off economically in all scenarios

Since the UK voted to leave the European Union in June 2016, Brexit has dominated UK politics and economic policy. Three and a half years after the referendum, the UK is yet to leave the EU, there is no certainty over if...Read more...

Blog

LSE Brexit:

Economic consequences of Brexit are overwhelmingly negative

The economic consequences of Brexit are overwhelmingly negative, estimate Swati Dhingra and Thomas Sampson (LSE). The more the UK distances itself from the EU’s economic institutions and policies, the greater will be the...Read more...

CEP election analysis

Brexit economics

Since the UK voted to leave the European Union in June 2016, Brexit has dominated UK politics and economic policy. Three and a half years after the referendum, the UK is yet to leave the EU, there is no certainty over if...Read more...

CEP Brexit analysis

The economic impact of Boris Johnson’s Brexit proposals

The Prime Minister Boris Johnson has set out a means of escaping the Brexit stalemate, but his new Brexit proposals have, as yet, not managed to overcome the impasse. What has been striking, though, is the extent to whic...Read more...

CEP discussion paper

Voting with their money: Brexit and outward investment by UK firms

We study the impact of the 2016 Brexit referendum on UK foreign direct investment. Using the synthetic control method to construct appropriate counterfactuals, we show that by March 2019 the Leave vote had led to a 17% i...Read more...

CentrePiece article

In brief... Brexit and outward investment by UK firms

Media reports have highlighted that some UK firms have started to move production abroad in anticipation of Brexit. CEP analysis confirms that there has indeed been a substantial increase in outward investments. The shif...Read more...

CEP discussion paper

Technology gaps, trade and income

This paper studies the origins and consequences of international technology gaps. I develop an endogenous growth model where R&D efficiency varies across countries and productivity differences emerge from firm-level tech...Read more...

CEP Brexit analysis

Voting with their money: Brexit and outward investment by UK firms

Foreign direct investment (FDI) has grown rapidly in recent decades. Through FDI, firms headquartered in the UK can own and operate subsidiaries throughout the world. FDI opportunities give firms a choice between investi...Read more...

Journal article

Fiscal Studies:

The Economic Effects of Brexit: Evidence from the Stock Market

We study stock market reactions to the Brexit referendum on 23 June 2016 in order to assess investors� expectations about the effects of leaving theEuropean Union on the UK economy. Our results suggest that initial sto...Read more...

CEP Brexit analysis

The economic consequences of the Brexit deal

Amidst the political fighting and fevered speculation about leadership challenges and parliamentary defeats for the government, one crucial issue seems to have been lost from sight. The deal negotiated with the European ...Read more...

CEP discussion paper

The economic effects of Brexit - evidence from the stock market

We study stock market reactions to the Brexit referendum on 23 June 2016 in order to assess investors’ expectations about the effects of leaving the European Union on the UK economy. Our results suggest that initial stoc...Read more...

CentrePiece article

The price of Brexit

Writing in the summer 2018 issue of CentrePiece magazine, Thomas Sampson notes that the full economic consequences of the UK’s leave vote will not be realised for many years. But two years after the referendum, we can al...Read more...

Journal article

Papers in Regional Science:

UK trade and FDI: A post-Brexit perspective

Leaving the EU will reshape the UK's economic relations with the rest of the world. This paper summarizes the findings of recent research studying the UK's role in the global economy, and the consequences of Brexit for U...Read more...

CentrePiece article

Brexit: the economics of international disintegration

Pro-Brexit rhetoric mixes up two distinct interpretations of what made people vote to Leave the European Union – and they have very different policy implications. As Thomas Sampson explains, those voters wanting to recla...Read more...

CEP Brexit analysis

The Brexit vote, inflation and UK living standards

The vote to leave the European Union (EU) was an unanticipated shock to the UK economy that increased uncertainty and reduced the country’s expected future openness to trade, investment and immigration with the EU. Our r...Read more...

CEP discussion paper

The productivity slowdown and the declining labor share: a neoclassical exploration

We explore the possibility that a global productivity slowdown is responsible for the widespread decline in the labor share of national income. In a neoclassical growth model with endogenous human capital accumulation a ...Read more...

Journal article

Journal of Economic Perspectives:

Brexit: the economics of international disintegration

On June 23, 2016, the United Kingdom held a referendum on its membership in the European Union. Although most of Britain's establishment backed remaining in the European Union, 52 percent of voters disagreed and handed a...Read more...

Journal article

Economic Policy:

The costs and benefits of leaving the EU: trade effects

This paper estimates the welfare effects of Brexit in the medium to long run, focusing on trade and fiscal transfers.We use a standard quantitative general equilibrium trade model with many countries and sectors and trad...Read more...

CEP discussion paper

Brexit: the economics of international disintegration

This paper reviews the literature on the likely economic consequences of Brexit and considers the lessons of the Brexit vote for the future of European and global integration. Brexit will make the United Kingdom poorer b...Read more...

CEP discussion paper

UK trade and FDI: a post-Brexit perspective

Leaving the EU will change the UK’s economic relations with the rest of the world. This paper discusses the UK’s role in the global economy and the consequences of Brexit for the UK’s trade, investment and living standar...Read more...

CEP election analysis

Brexit and the UK Economy

This general election is pitched as the ‘Brexit Election’, one that will give the incoming government a mandate to negotiate the terms of the UK’s exit from the European Union (EU). The Conservatives and Labour have both...Read more...

CEP discussion paper

The costs and benefits of leaving the EU: trade effects

This paper estimates the welfare effects of Brexit, focusing on trade and fiscal transfers. We use a standard quantitative general equilibrium trade model with many countries and sectors and trade in intermediates, as in...Read more...

Journal article

American Economic Review:

Balanced growth despite uzawa

The evidence for the United States points to balanced growth despite falling investment-good prices and a less-than-unitary elasticity of substitution between capital and labor. This is inconsistent with the Uzawa Growth...Read more...

Journal article

Oxford Review of Economic Policy:

A hitch-hiker's guide to post-Brexit trade negotiations: Options and principles

Brexit will require the UK to negotiate new trade arrangements with the EU. After summarizing the main options for future UK-EU trade relations, this article reviews the purpose of trade agreements. We highlight that tra...Read more...

CentrePiece article

Four principles for the UK's Brexit trade negotiations

The first priority in the UK government’s plans for Brexit trade negotiations should be to agree a transitional deal to cover its relations with the European Union (EU) until a long-term agreement is reached. What’s more...Read more...

CEP Brexit analysis

Four principles for the UK's Brexit trade negotiations

The UK has yet to decide what post-Brexit trade deals it wants with other countries. To achieve the objectives it ends up choosing, the UK should develop a negotiating strategy based on four principles outlined in this p...Read more...

Blog

LSE British Politics and Policy:

Foreign investors love Britain – but Brexit would end the affair

Foreign investment brings many benefits to the UK, including higher pay and productivity. But a Brexit vote could end it all, write Swati Dhingra, Gianmarco Ottaviano, Thomas Sampson and John Van Reenen. First, not being...Read more...

CEP Brexit analysis

BREXIT 2016: policy analysis from the Centre for Economic Performance

On June 23rd, the British people will vote in a referendum over whether or not to remain in the European Union. It is the most important vote that most of us will have in our lifetimes. And one that will have major reper...Read more...

CentrePiece article

Foreign investors love Britain - but Brexit would end the affair

Investment from overseas brings many benefits to the UK economy, including higher pay and productivity. According to CEP research, leaving the European Union could lead to a fall in inward foreign direct investment in th...Read more...

CentrePiece article

Brexit: the impact on UK trade and living standards

For over two years, a CEP research team has been studying the likely impact on the living standards of UK households of a referendum vote to leave the European Union. The first of three reports summarised here focuses on...Read more...

Blog

LSE British Politics and Policy:

No one would be spared: how the costs of Brexit would be distributed across households

That leaving the EU would damage the overall economy is now being treated as more of a fact than a speculation. But those for Brexit argue that the rich will be negatively affected while the poor will benefit. This is no...Read more...

Blog

LSE European Politics and Policy Blog:

The ‘Britain Alone’ scenario: how Economists for Brexit defy the laws of gravity

There is a degree of consensus among economists that a Brexit will make us worse off. The exception is recent work by Economists for Brexit. Their forecast of income gains from Brexit contrasts with all other economic an...Read more...

CEP Brexit analysis

Who bears the pain? How the costs of Brexit would be distributed across income groups

Read more...

Blog

LSE British Politics and Policy:

The ‘Britain Alone’ scenario: how Economists for Brexit defy the laws of gravity

There is a degree of consensus among economists that a Brexit will make us worse off. The exception is recent work by Economists for Brexit. Their forecast of income gains from Brexit contrasts with all other economic an...Read more...

CEP Brexit analysis

‘ECONOMISTS FOR BREXIT’: A critique

Read more...

Journal article

Journal of Economic Theory:

Assignment reversals: Trade, skill allocation and wage inequality

The allocation of skilled labor across industries shapes inter-industry wage differences and wage inequality. This paper shows the ranking of industries by workforce skill differs between developed and developing countri...Read more...

CEP Brexit analysis

The UK Treasury analysis of 'The long-term economic impact of EU membership and the alternatives': CEP Commentary

Overly cautious assumptions in the Treasury’s recent report on the long-run consequences for the UK economy of leaving the European Union (EU) mean that it has probably underestimated the economic costs. That is one of t...Read more...

CEP Brexit analysis

The impact of Brexit on foreign investment in the UK

The third in a series of Brexit reports from the Centre for Economic Performance (CEP), examines how leaving the EU would affect UK incomes through changes in foreign investment in the UK. Leaving the European Union (EU)...Read more...

Blog

LSE British Politics and Policy:

The question is not whether Brexit will cost the UK in economic terms but how much

For over two years, a research team at the Centre for Economic Performance (CEP) has been studying the likely impact of the UK leaving the European Union. Their latest report focuses on the impact of ‘Brexit’ through cha...Read more...

CEP Brexit analysis

The consequences of Brexit for UK trade and living standards

The economic consequences of leaving the EU will depend on what policies the UK adopts following Brexit. But lower trade due to reduced integration with EU countries is likely to cost the UK economy far more than is gain...Read more...

CEP Brexit analysis

Life after Brexit : what are the UK’s options outside the European Union?

Suppose the UK votes to leave the European Union (EU): what happens next? This report outlines some of the options for the UK outside the EU and discusses the costs and benefits of each alternative....Read more...

Journal article

The Quarterly Journal of Economics:

Dynamic selection: An idea flows theory of entry, trade, and growth

This article develops an idea flows theory of trade and growth with heterogeneous firms. Entrants learn from incumbent firms, and the diffusion technology is such that learning depends not on the frontier technology, but...Read more...

CEP discussion paper

Balanced growth despite Uzawa

Evidence for the United States suggests balanced growth despite falling investment-good prices and less than unitary elasticity of substitution between capital and labor. This is inconsistent with the Uzawa Growth Theore...Read more...

CEP election analysis

#ElectionEconomics: The Research Evidence on Key Issues for Voters in the 2015 UK General Election

Please see the CEP #ElectionEconomics report(Paper 1)and the Executive Summary (Paper 2) that cover all the election 2015 briefings, discussing the research evidence on 15 of the UK's key policy battlegrounds: immigratio...Read more...

CEP election analysis

Should We Stay or Should We Go? The economic consequences of leaving the EU

We analyze the effects of Brexit on the UK economy. The most important economic consequence of Brexit would likely be reduced trade with EU countries. We consider an optimistic scenario with relatively small increases in...Read more...

CEP discussion paper

Dynamic selection: an idea flows theory of entry, trade and growth

This paper develops an idea flows theory of trade and growth with heterogeneous firms. New firms learn from incumbent firms, but the diffusion technology ensures entrants learn not only from frontier technologies, but fr...Read more...

Blog

LSE European Politics and Policy Blog:

Leaving the European Union would likely have a significant negative impact on the UK’s economy

How would leaving the EU affect the UK’s economy? Gianmarco Ottaviano, João Paulo Pessoa, Thomas Sampson and John Van Reenen outline findings from a new report on the economic consequences of a ‘Brexit’. They indicate th...Read more...

CEP policy analysis

Brexit or Fixit? The Trade and Welfare Effects of Leaving the European Union

Since a speech by the Prime Minister in January 2013 , the Conservative party has been committed to holding a referendum on the UK’s membership of the European Union (EU) in 2017. So this is a good moment to consider wha...Read more...

CEP discussion paper

Brain Drain or Brain Gain? Technology Diffusion and Learning On-the-job

This paper develops a theory of technology transfer when technology is embodied in human capital and learning requires on-the-job communication between managers and workers. Patterns of knowledge diffusion depend on wher...Read more...

CEP discussion paper

Selection into Trade and Wage Inequality

This paper analyzes the impact of trade integration on wage inequality when there is heterogeneity across both workers and firms. By incorporating labor assignment into the heterogeneous firms literature I develop a mode...Read more...

CEP discussion paper

Assignment Reversals: Trade, Skill Allocation and Wage Inequality

Understanding the allocation of skilled labor across industries is necessary to explain inter-industry wage differences and the effect of trade on wages. This paper develops a multi-sector assignment model with both hete...Read more...