Brexit and Its Economic Implications: A Computable General Equilibrium Approach

다국어 초록 (Multilingual Abstract)

The objective of this study is to conduct a quantitative assessment of the likely economic effects of Brexit on the UK and EU27 as well as non-EU members using a multi-region, multi-sector CGE model to show its implications for the global economy. The simulation results reveal that Brexit is predicted to lead to lower economic growth of the UK and EU27 member countries with a lower level of welfare, which is caused mainly by the trade diverting effects occurring between both the UK and EU27 and non-EU members, while non-EU members are to gain a slight increase in real GDP and welfare. The total exports of the UK and EU27 are predicted to drop. The total imports of the UK and EU27 are to decrease more than the total exports of UK and EU27 are.
The UK and EU27 are predicted to run trade surplus, which will be worsened by their deteriorated terms of trade. Brexit is expected to bring the so-called “trade surplus in economic recession” to the UK and EU27. To sum, as the world trade and output are predicted to drop, Brexit will be detrimental to the global economy. The potential economic effects of Brexit will depend on the results of negotiations on Brexit regarding trade relations, foreign direct investment, migration, and so on, which will start early 2018.

참고문헌 (Reference)

1 고종환, "동태CGE모형을 이용한 한-미 FTA 서비스분야 협상 타결의 경제적 영향분석" 국제지역학회 13 (13): 695-728, 2009

2 Whalley, John, "Trade Liberalization among Major World Trading Areas"

3 Ianchovichina, "Theoretical Structure of Dynamic GTAP" GTAP 2000

4 Redwood, John, "The end of British austerity starts with Brexit"

5 Deardorff, Alan, "The Michigan Model of World Production and Trade"

6 Emmerson, Carl, "The EU Single Market: The Value of Membership versus Access to the UK" Institute for Fiscal Studies

7 Aguiar, Angel, "Overview of the GTAP 9 Data Base" 1 : 181-208, 2016

8 Baldwin, Robert E., "Measurable Dynamic Gains from Trade" 100 : 162-174, 1992

9 Government of the United Kingdom, "HM Treasury analysis: the long-term economic impact of EU membership and the alternatives"

10 Hertel, Thomas W., "Global Trade Analysis: Modeling and Applications" Cambridge University Press 1997

11 Devarajan, Shantayanan, "From Stylized to Applied Models: Building Multisector CGE Models for Policy Analysis"

12 Ko, J.-H., "Europäische Hochschulschriften" Verlag Peter Lang 1993

13 Copenhagen Economics, "Economic Impact of a Potential Free Trade Agreement (FTA) Between the European Union and South Korea"

14 고종환, "Economic Assessment of Korea-EU FTA using a CGE Model with FDI" EU연구소 (36) : 37-71, 2014

15 European Commission, "EU-Canada Comprehensive Economic and Trade Agreement (CETA)"

16 THE ELECTORAL COMMISSION, "EU Referendum Results"

17 Ko, Jong-Hwan, "Chapter 7.K: Korea"

18 Thomas Sampson, "Brexit: The Economics of International Disintegration" American Economic Association 31 (31): 163-184, 2017

19 BBC, "Brexit: All you need to know about the UK leaving the EU"

20 IGM Forum, "Brexit survey II"

21 The Lisbon Treat website, "Article 50"

22 Ko, Jong-Hwan, "An Analysis of Economic Effects of the Korea-U.S. FTA using a Dynamic CGE Model" German Institute of Economic Research 2-4, 2008

23 Armington, Paul S., "A Theory of Demand for Products Distinguished by Place of Production" 16 (16): 159-178, 1969

24 고종환, "A Study on the Economic Effects of the Korea-EU FTA Using a Dynamic CGE Model" 한국무역연구원 10 (10): 225-250, 2014

25 European Commission, "-Japan Economic Partnership Agreement"