Brexit – potential economic consequences if the UK exits the EU. Policy Brief #2015/05

Schoof, Ulrich and Petersen, Thieß and Aichele, Rahel and Felbermayr, Gabriel (2015) Brexit – potential economic consequences if the UK exits the EU. Policy Brief #2015/05. [Policy Paper]

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Abstract

If the United Kingdom (UK) exits the EU in 2018, it would reduce that country’s exports and make imports more ex-pensive. Depending on the extent of trade policy isolation, the UK’s real gross domestic product (GDP) per capita would be between 0.6 and 3.0 percent lower in the year 2030 than if the country remained in the EU. If we take into ac-count the dynamic effects that economic integration has on investment and innovation behavior, the GDP losses could rise to 14 percent. In addition, it will bring unforeseeable political disadvantages for the EU – so from our perspective, we must avoid a Brexit.

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