Spoiler. Everyone in the EU lose due to Brexit but UK residents lose more. The short-term reduction of British GDP is around three times as large as of EU GDP. As time goes by employment rates are restored but due to less trade and lower productivity growth, GDP and welfare will be lower than without Brexit. Most of the burdens of tariffs and NTBs fall on consumers. As time goes by, we and especially UK residents will be poorer than if the UK had remained in the EU.Continue reading
The shit hit the fan today. It may still be a hard Brexit unless all negotiations are closedbefore the end of the year. In the case of a hard Brexit, consequences will be worse since firms inside or outside of Britain will have less time to adapt to the changed conditions. The current supply chains might be disrupted as the existing buyer-seller relationships may need to be replaced due to changes in costs to import and export from and to the UK. Swedish firms relying on British intermediate products may find that relative prices of these products have increased so much that new suppliers must be found. And vice-versa, Swedish firms supplying intermediate products may find that the new conditions may not make the British market profitable anymore.
“Project Fear” was right. The UK is more dependent on the EU than vice versa. That’s why the effects in the UK will be worse than in the EU. Continue reading
We will miss you guys. Continue reading