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  • Author: Jannike Wachowiak
  • Publication Date: 10-2020
  • Content Type: Working Paper
  • Institution: European Policy Centre
  • Abstract: As the end of the transition period nears, the EU must prepare for a fundamentally different and more conflictual relationship with the UK. Whatever the outcome of the Brexit negotiations, there will be profound economic, political and geopolitical implications for the EU. While the EU as a whole might be better placed than the UK to absorb the economic shock of a no-deal, the fallout within the EU will be uneven, resulting in winners and losers. The asymmetrical impact and differential capacity and willingness of national governments to mitigate the shock could exacerbate regional disparities and unbalance the EU’s internal level playing field. As such, it might become more difficult to maintain the same level of EU unity post-no-deal.
  • Topic: Diplomacy, Treaties and Agreements, European Union, Brexit
  • Political Geography: Britain, Europe
  • Author: Facundo Albornoz, Jake Bradley, Silvia Sonderegger
  • Publication Date: 06-2020
  • Content Type: Working Paper
  • Institution: Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP)
  • Abstract: We show that the sharp increase in hate crime following the Brexit referendum was more pronounced in more pro-remain areas. This is consistent with a model where behavior is dictated by the desire to conform to imperfectly observed social norms in addition to following individual preferences, and where the referendum revealed that society’s real preferences over immigration were less positive than previously thought. For identification, we exploit the feature that the referendum revealed new information overnight in a context where other determinants of attitudes remained constant. The data can be replicated with a sensible parameterization of the model.
  • Topic: Immigration, Public Opinion, Brexit, Discrimination
  • Political Geography: Britain, United Kingdom
  • Author: Maria C. Latorre, Zoryana Olekseyuk, Hidemichi Yonezawa, Sherman Robinson
  • Publication Date: 03-2019
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: This paper examines 12 economic simulation models that estimate the impact of Brexit (Britain’s exit from the European Union). Most of the studies find adverse effects for the United Kingdom (UK) and the EU-27. The UK’s GDP losses from a hard Brexit (reversion to World Trade Organization rules due to a lack of UK-EU agreement) range from –1.2 to –4.5 percent in most of the models analyzed. A soft Brexit (e.g., Norway arrangement, which seems in line with the nonbinding text of the political declaration of November 14, 2018, on the future EU-UK relationship) has about half the negative impact of a hard Brexit. Only two of the models derive gains for the UK after Brexit because they are based on unrealistic assumptions. The authors analyze more deeply a computable general equilibrium model that includes productivity and firm selection effects within manufacturing sectors and operations of foreign multinationals in services. Based on this latest model, they explain the likely economic impact of Brexit on a wide range of macroeconomic variables, namely GDP, wages, private consumption, capital remuneration, aggregate exports, aggregate imports, and the consumer price index.
  • Topic: Economics, World Trade Organization, Brexit, Multinational Corporations
  • Political Geography: Britain, Europe, European Union
  • Author: Tarek A. Hassan, Laurence van Lent, Stephan Hollander, Ahmed Tahoun
  • Publication Date: 01-2019
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: Using tools from computational linguistics, we construct new measures of the impact of Brexit on listed firms in the United States and around the world: the share of discussions in quarterly earnings conference calls on costs, benefits, and risks associated with the UK’s intention to leave the EU. Using this approach, we identify which firms expect to gain or lose from Brexit and which are most affected by Brexit uncertainty. We then estimate the effects of these different kinds of Brexit exposure on firm-level outcomes. We find that concerns about Brexit-related uncertainty extend far beyond British or even European firms. US and international firms most exposed to Brexit uncertainty have lost a substantial fraction of their market value and have reduced hiring and investment. In addition to Brexit uncertainty (the second moment), we find that international firms overwhelmingly expect negative direct effects of Brexit (the first moment), should it come to pass. Most prominently, firms expect difficulties resulting from regulatory divergence, reduced labor mobility, trade access, and the costs of adjusting their operations post-Brexit. Consistent with the predictions of canonical theory, this negative sentiment is recognized and priced in stock markets but has not yet had significant effects on firm actions.
  • Topic: Economics, Political Economy, Regional Cooperation, Brexit, Global Political Economy, Economic Policy
  • Political Geography: Britain, United States, United Kingdom, Europe, European Union
  • Author: Julian Lindley-French
  • Publication Date: 11-2017
  • Content Type: Working Paper
  • Institution: Canadian Global Affairs Institute (CGAI)
  • Abstract: Will Britain’s departure from the EU lead to the creation of an Anglosphere and a Eurosphere within NATO? Unfortunately, there are a range of challenges to such a formulation. First, if the EU continues to drive a hard post-Brexit relationship with the British, it may be increasingly difficult for any government in London to convince the British people that other Europeans are worth defending. Second, would the United States, Canada and others entertain such an idea? Third, France is not going to abandon its strategic relationship with Britain – Brexit or no Brexit. Fourth, there will be a Brexit deal and Britain will remain a key factor in European defence. Fifth, “events, dear boy, events!” However, Brexit or no Brexit, NATO’s pillars are shifting. The United States will demand more of its allies if Washington is to maintain a credible security and defence guarantee for Europe. The changing nature of conflict will tend to emphasize intelligence and power projection, both of which play to Britain’s residual strengths. Canada? It is hard for an outsider to discern Canadian defence policy, other than bumbling along in strategic suburbia with the desire to be seen as the good neighbour. This is a mistake. NATO’s shifting pillars will have profound implications for Canadian security and defence policy. A formal Anglosphere and Eurosphere within NATO? Most likely not. A U.S.-sphere and German-sphere? Quite possibly, but don’t mention it in polite company. Canada? Who knows?
  • Topic: Security, Defense Policy, NATO, Brexit, Alliance
  • Political Geography: Britain, Europe, Canada, North America
  • Author: Krševan Antun Dujmović
  • Publication Date: 06-2017
  • Content Type: Working Paper
  • Institution: Institute for Development and International Relations (IRMO)
  • Abstract: Over the course of past twelve months, Europe was holding its breath in a couple of nerve wrecking moments that were to decide the destiny of the European Union (EU). Indeed, in June last year the British cast their votes for the unimaginable and decided that the United Kingdom (UK) should leave the EU. Shockwaves battered the woozy continent sprawling from over the other side of the English Channel, and it was the President of the European Parliament, incumbent German SPD leader Martin Schulz who exclaimed in the wake of the Brexit vote that the UK should exit the EU as quickly as possible. Just four months later Europe experienced another shockwave, this time propelled from the other side of the Atlantic, as the Americans voted for Donald Trump, who was in support of Brexit during his campaign, advocating overtly against the European integration and even renouncing the fundament of Trans-Atlantic integration - NATO. The beginning of 2017 set a murky atmosphere as the EU started to brace itself for another big test in France. The victory of Emmanuel Macron in May meant that the EU would survive, albeit crippled as the Britons lead by Theresa May continued relentlessly their divorce with Europe by triggering the Article 50 in March. With the British already one foot out, and the French �irmly in the Union, the attention of the European public is shifting more to Germany which will hold the federal election on September 24th this year. After the disappointing break away decision in Britain, some Europeans seem to invoke a renewed Franco-German axis as the power engine of European integration. Since the great economic depression swept Europe like a contagion in 2008, Germany has been the best performing European economy, and German Chancellor Angela Merkel was perceived as the “savior of Europe”. Due to these facts, it is no wonder that all of Europe eagerly expects the outcome of the German federal election which will largely determine the fate of the continent.
  • Topic: Elections, European Union, Brexit
  • Political Geography: Britain, Europe, France, Germany, Western Europe