Wednesday, December 7th, 2016 8:55 am

Brexit

Question A: Because of the Brexit vote's outcome, the UK's real per-capita income level is likely to be lower a decade from now than it would have been otherwise.

Responses
 

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel

Responses weighted by each expert's confidence

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel

Question B: Because of the Brexit vote's outcome, the rest of the EU's real per-capita income level is likely to be lower a decade from now than it would have been otherwise.

Responses
 

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel

Responses weighted by each expert's confidence

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel

Question A Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Aghion Philippe Aghion Harvard Did Not Answer
Bio/Vote History
         
Allen Franklin Allen Imperial College London Uncertain 5
It's very difficult to know how the negotiations for trade and immigration will play out. The benefits of being outside the EU are unclear.
Bio/Vote History
         
Antras Pol Antras Harvard Agree 5
It will probably be lower than it would have been, but by how much depends on negotiations with EU and attitudes towards immigrants
Bio/Vote History
         
Baldwin Richard Baldwin The Graduate Institute Geneva Strongly Agree 10
it will disrupt Factory Europe and UK's role in it; to restore UK competitivenes, UK wages must fall relative to those of its EU competittor
Bio/Vote History
         
Besley Timothy J. Besley LSE Agree 7
Higher trade costs and poorer access to European markets.
Bio/Vote History
         
Blanchard Olivier Blanchard Peterson Institute Agree 8
I do not see the benefits which compensate the loss of full access to the EU market.
Bio/Vote History
         
Bloom Nicholas Bloom Stanford Strongly Agree 10
Brexit will reduce trade and immigration because of higher barriers to both. Uncertainty will reduce investment and R&D in the short run
Bio/Vote History
         
Blundell Richard William Blundell University College London Strongly Agree 9
The tariff-free single market across Europe together with the integration of skilled labour market adds significantly to UK real income.
Bio/Vote History
         
Bénassy-Quéré Agnès Bénassy-Quéré Paris School of Economics Strongly Agree 9
Bio/Vote History
         
Carletti Elena Carletti Bocconi Agree 7
Britain will be poorer as a consequence of the exit from the EU but a lot will depend on how the negotiations will go.
Bio/Vote History
         
Danthine Jean-Pierre Danthine Paris School of Economics Strongly Agree 8
We do not know the terms of the Brexit. There is a possibility but small probability that the negotiated deal amounts to a status quo.
Bio/Vote History
         
De Grauwe Paul De Grauwe LSE Agree 8
Bio/Vote History
         
Eeckhout Jan Eeckhout University College London Uncertain 8
Depends on the Brexit deal.
Bio/Vote History
         
Fehr Ernst Fehr Universität Zurich Agree 8
Bio/Vote History
         
Freixas Xavier Freixas Universitat Pompeu Fabra Strongly Agree 7
Limiting trade reduces growth, specially when there are no nascent industries that could generate some long term externalities
Bio/Vote History
         
Fuchs-Schündeln Nicola Fuchs-Schündeln Goethe-Universität Frankfurt Agree 7
Bio/Vote History
         
Galí Jordi Galí Universitat Pompeu Fabra Uncertain 9
It all hinges on the post-Brexit arrangement between the UK and the EU. I wouldn't know how to predict that outcome, it's entirely political
Bio/Vote History
         
Garicano Luis Garicano LSE Did Not Answer
Bio/Vote History
         
Giavazzi Francesco Giavazzi Bocconi Uncertain 5
Bio/Vote History
         
Griffith Rachel Griffith University of Manchester Strongly Agree 8
Theory and empirical studies all say that the UK has benefited from trade and the EU Single Market Program; leaving will reverse this.
-see background information here
Bio/Vote History
         
Guerrieri Veronica Guerrieri Chicago Booth Strongly Agree 8
Bio/Vote History
         
Guiso Luigi Guiso Einaudi Institute for Economics and Finance Agree 6
Bio/Vote History
         
Hellwig Martin Hellwig Max Planck Institute for Research on Collective Goods Did Not Answer
Bio/Vote History
         
Honohan Patrick Honohan Trinity College Dublin Strongly Agree 9
Period of uncertainty will reduce capital formation. Inward-looking politics will limit benefits of globalization.
Bio/Vote History
         
Kleven Henrik Kleven LSE Agree 5
Bio/Vote History
         
Krahnen Jan Pieter Krahnen Goethe University Frankfurt Disagree 5
Think of the EU as a collective good with some redistributive features. Strong countries that separate leave tab on the table for remainers.
Bio/Vote History
         
Krusell Per Krusell Stockholm University Agree 8
There is some small chance that the EU will malfunction badly in the future, in which case Brexit may be good ex post.
Bio/Vote History
         
Kőszegi Botond Kőszegi Central European University Agree 2
Bio/Vote History
         
La Ferrara Eliana La Ferrara Bocconi Agree 8
Bio/Vote History
         
Leuz Christian Leuz Chicago Booth Agree 3
Trade barriers and uncertainty are negative. But much will depend on terms of exit and when it will be triggered.
Bio/Vote History
         
Meghir Costas Meghir Yale Strongly Agree 1
Bio/Vote History
         
Neary Peter Neary Oxford Strongly Agree 10
Definitely a negative impact, though how much depends on how hard is the Brexit and how long the associated uncertainty persists
-see background information here
Bio/Vote History
         
O'Rourke Kevin O'Rourke Oxford Uncertain 8
We don't know yet what form Brexit will take. If the UK chooses to stay in the EEA & customs union the economic consequences will be minimal
Bio/Vote History
         
Pagano Marco Pagano Università di Napoli Federico II Strongly Agree 9
Almost all the estimates and forecasts regarding the impact of Brexit on international trade converge on this prediction.
-see background information here
Bio/Vote History
         
Pastor Lubos Pastor Chicago Booth Agree 9
Bio/Vote History
         
Persson Torsten Persson Stockholm University Uncertain 8
The consequences of Brexit depend completely on the exit terms, which we know very little about.
Bio/Vote History
         
Pissarides Christopher Pissarides LSE Agree 10
The UK benefited from access to the EU single market. How much worse off it will be will depend on the access that it will get post-exit
Bio/Vote History
         
Portes Richard Portes London Business School Strongly Agree 10
The IMF, the OECD, the UK Treasury, the IFS, the LSE CEP are unanimous on this, and 90% of UK economists surveyed agree - correctly.
Bio/Vote History
         
Prendergast Canice Prendergast Chicago Booth Agree 7
Bio/Vote History
         
Reichlin Lucrezia Reichlin London Business School Agree 8
Bio/Vote History
         
Repullo Rafael Repullo CEMFI Agree 8
Bio/Vote History
         
Rey Hélène Rey London Business School Strongly Agree 8
Bio/Vote History
         
Schoar Antoinette Schoar MIT Strongly Agree 7
Bio/Vote History
         
Van Reenen John Van Reenen MIT Strongly Agree 10
Extensive work on this by myself, CEP, LSE, NIESR, etc. Trade costs with closest UK trading partner rise so trade & FDI fall. Incomes lower
-see background information here
Bio/Vote History
         
Vickers John Vickers Oxford Agree 8
Brexit is v probably (but not certainly) bad for trade and investment. The £ drop reflects this but is an efficient way to be worse off..
Bio/Vote History
         
Voth Hans-Joachim Voth University of Zurich Agree 5
we know very little about the long-run effects of common market access on service trade, the most important component of UK exports
Bio/Vote History
         
Weder di Mauro Beatrice Weder di Mauro Gutenberg University Mainz and INSEAD Strongly Agree 9
Bio/Vote History
         
Whelan Karl Whelan University College Dublin Strongly Agree 9
Tarriffs & non-tarriff barriers with the EU $ the likely re-introduction of state aids and subsidies will have negative supply-side effects.
Bio/Vote History
         
Wyplosz Charles Wyplosz The Graduate Institute Geneva Agree 4
We do not know yet what will be the outcome of the negotiations. If Brexit occurs and is messed up, then it will hurt the UK.
Bio/Vote History
         
Zilibotti Fabrizio Zilibotti Universität Zurich Agree 6
Expected negative effects on trade and integration, and loss of London as a financial center. Uncertain counterfactual: will there be EU?.
Bio/Vote History
         

Question B Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Aghion Philippe Aghion Harvard Did Not Answer
Bio/Vote History
         
Allen Franklin Allen Imperial College London Uncertain 5
Again very difficult to know how things will play out at this stage.
Bio/Vote History
         
Antras Pol Antras Harvard Uncertain 6
Brexit would largely be bad for Europe in the long run, but some relocation effects could be beneficial in the short/medium run
Bio/Vote History
         
Baldwin Richard Baldwin The Graduate Institute Geneva Disagree 10
UK is a only a small part of Factory Europe and political reactions are likely to shield most critical parts.
Bio/Vote History
         
Besley Timothy J. Besley LSE Agree 7
The UK is an important trading partner and the UK has also been an effective champion for open markets within the EU.
Bio/Vote History
         
Blanchard Olivier Blanchard Peterson Institute Agree 6
Again, loss of full access to UK market is a minus, although small. Political implications re EU construction can go one way or the other
Bio/Vote History
         
Bloom Nicholas Bloom Stanford Strongly Agree 9
The EU has been driving free markets, trade and openess across Europe. Brexit weakens the EU, and this weakens these pro-growth forces.
Bio/Vote History
         
Blundell Richard William Blundell University College London Agree 7
The UK is a major influence in improving economic policy and a large trading partner. A decline in this will have a negative impact on EU.
Bio/Vote History
         
Bénassy-Quéré Agnès Bénassy-Quéré Paris School of Economics Strongly Agree 9
The impact on the EU is likely to be less than that on the UK, except if Brexit is the beginning of a progressive breakup of the EU.
Bio/Vote History
         
Carletti Elena Carletti Bocconi Uncertain 7
again there is lot of uncertainty at the moment, so any prediction is difficult, especially in terms of the consequences for the EU
Bio/Vote History
         
Danthine Jean-Pierre Danthine Paris School of Economics Agree 6
Brexit is a negative but it could lead the Europeans to adopt better policies in reaction
Bio/Vote History
         
De Grauwe Paul De Grauwe LSE Uncertain 7
The effect on the rest of the EU will be limited.
Bio/Vote History
         
Eeckhout Jan Eeckhout University College London Uncertain 9
Bio/Vote History
         
Fehr Ernst Fehr Universität Zurich Disagree 8
Bio/Vote History
         
Freixas Xavier Freixas Universitat Pompeu Fabra Strongly Agree 5
Lower trade implies lower growth and more inefficiencies. The lack of a political willingness to rebuild Europe is also problematic
Bio/Vote History
         
Fuchs-Schündeln Nicola Fuchs-Schündeln Goethe-Universität Frankfurt Strongly Agree 8
Bio/Vote History
         
Galí Jordi Galí Universitat Pompeu Fabra Disagree 6
I cannot see the channels through which the rest of the EU would be significantly affected.
Bio/Vote History
         
Garicano Luis Garicano LSE Did Not Answer
Bio/Vote History
         
Giavazzi Francesco Giavazzi Bocconi Uncertain 5
Bio/Vote History
         
Griffith Rachel Griffith University of Manchester Strongly Agree 7
Brexit will reduce the benefit the EU gets from trade with the UK and weaken the EU Single Market Program.
Bio/Vote History
         
Guerrieri Veronica Guerrieri Chicago Booth Strongly Agree 8
Bio/Vote History
         
Guiso Luigi Guiso Einaudi Institute for Economics and Finance Agree 7
UK exit weakens the support for pro-market policies in the EU altering the balance of powers towards more state-oriented policies
Bio/Vote History
         
Hellwig Martin Hellwig Max Planck Institute for Research on Collective Goods Did Not Answer
Bio/Vote History
         
Honohan Patrick Honohan Trinity College Dublin Agree 6
Britain's departure weakens EU ties; Brexit negotiations will sap energy and divert attention from other pressing problems.
Bio/Vote History
         
Kleven Henrik Kleven LSE Uncertain 6
Bio/Vote History
         
Krahnen Jan Pieter Krahnen Goethe University Frankfurt Agree 5
As the UK leaves, an advocate of markets and free competition departs - with negative consequences for the rest of the EU.
Bio/Vote History
         
Krusell Per Krusell Stockholm University Agree 7
biggest risk is political: Brexit's anti-establishment message spreads. purely economic spillovers likely minor.
Bio/Vote History
         
Kőszegi Botond Kőszegi Central European University Uncertain 3
Bio/Vote History
         
La Ferrara Eliana La Ferrara Bocconi Uncertain 5
Bio/Vote History
         
Leuz Christian Leuz Chicago Booth Agree 3
EU larger than UK, so impact likely smaller but same caveat as in first part. Also, EU lost force for more open and flexible markets.
Bio/Vote History
         
Meghir Costas Meghir Yale Agree 1
Bio/Vote History
         
Neary Peter Neary Oxford Agree 8
Europe is more important to the UK than vice versa, so the effect on the rest of the EU should be less severe though still negative
Bio/Vote History
         
O'Rourke Kevin O'Rourke Oxford Uncertain 8
Same comment as before. But in any event the consequences will be less for the EU 27 taken as a whole.
Bio/Vote History
         
Pagano Marco Pagano Università di Napoli Federico II Strongly Agree 9
Brexit implies GDP losses for the EU not only because of lower trade with the UK but also because of disruption in the finance industry.
-see background information here
Bio/Vote History
         
Pastor Lubos Pastor Chicago Booth Agree 7
Bio/Vote History
         
Persson Torsten Persson Stockholm University Uncertain 8
Brexit can either trigger more exits, or make remaining EU countries pull closer together, so very hard to call the effects.
Bio/Vote History
         
Pissarides Christopher Pissarides LSE Agree 10
The UK is a large market for many EU countries and trade restrictions post-exit will have a cost
Bio/Vote History
         
Portes Richard Portes London Business School Strongly Agree 10
As for previous question, but add European Commission. Open borders, trade and competition are good for innovation and growth.
Bio/Vote History
         
Prendergast Canice Prendergast Chicago Booth Agree 6
Bio/Vote History
         
Reichlin Lucrezia Reichlin London Business School Agree 9
Bio/Vote History
         
Repullo Rafael Repullo CEMFI Agree 4
Bio/Vote History
         
Rey Hélène Rey London Business School Uncertain 6
A lot will depend on the political dynamics in the EU unleashed by the Brexit vote. More dislocation or more integration?
Bio/Vote History
         
Schoar Antoinette Schoar MIT Uncertain 6
The effect of Brexit on the EU is uncertain since it also depends on how it affects the political institutions of the EU going forward.
Bio/Vote History
         
Van Reenen John Van Reenen MIT Strongly Agree 10
Because trade costs will rise with UK's closest neighbours, trade and FDI will fall. This depresses income (see work by CEP, NIESR, PWC, etc
-see background information here
Bio/Vote History
         
Vickers John Vickers Oxford Agree 5
Trade uncertainty bad for EU too. Necessary EU reforms less likely without UK.
Bio/Vote History
         
Voth Hans-Joachim Voth University of Zurich Uncertain 3
It depends on how much free market momentum is lost within the EU due to Brexit
Bio/Vote History
         
Weder di Mauro Beatrice Weder di Mauro Gutenberg University Mainz and INSEAD Agree 8
Bio/Vote History
         
Whelan Karl Whelan University College Dublin Agree 5
The trade impact on the rest of the EU will be proportionately less than for the UK but this is still a negative.
Bio/Vote History
         
Wyplosz Charles Wyplosz The Graduate Institute Geneva Disagree 4
The UK is not that important for the EU for trade. What matters is that the UK was a reasonable voice among often confused leaders.
-see background information here
Bio/Vote History
         
Zilibotti Fabrizio Zilibotti Universität Zurich Disagree 7
UK will suffer more tan the EU in economic terms. UK was no constructive partner in institution building.
Bio/Vote History
         

About the European IGM Economic Experts Panel

This panel explores the views of European economists on vital public policy issues. It does this by polling them on important policy questions, by including a way for them to explain their answers briefly if they wish, and by disseminating these responses directly to the public in a simple format.

To that end, our panel was chosen to include distinguished experts with a keen interest in public policy from the main areas of economics, to be geographically diverse, and to include older and younger scholars. As with the IGM’s US panel, the experts are all outstanding researchers in their fields. The panel includes recipients of top national and international prizes in economics, fellows of the Econometric society and the European Economic Association, members of distinguished national and international policymaking bodies in Europe, recipients of significant grants for economic research, highly accomplished affiliates and program directors of the Centre for Economic Policy Research and the National Bureau of Economic Research, and past and current editors of leading academic journals in the profession. This approach not only provides a set of panelists whose names will be familiar to other economists and the media, but also delivers a group with impeccable qualifications to speak on public policy matters in Europe and beyond.

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