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What can fixit after Brexit? An empirical study of the economic effect on UK trade, following an exit from the European Union

Andersson, Sofie LU and Nilsson, Frida (2016) NEKH03 20162
Department of Economics
Abstract
One of the most debated political events during 2016 was the referendum regarding the United Kingdom’s future in the European Union. Despite the many warnings received from economists the UK voters voted for ‘leave’, paving the way for Brexit. This thesis reviews some possible alternatives regarding the UK-EU relationship post Brexit and concludes that the economically best case scenario would be for the UK to replace their current EU membership with an EEA agreement outlined as the one today enjoyed by Norway. The authors then uses the best case scenario alternative to estimate the loss in UK trade in goods with the EU. The estimation is done using a modified gravity model. Through the empirical study the authors find that leaving the EU... (More)
One of the most debated political events during 2016 was the referendum regarding the United Kingdom’s future in the European Union. Despite the many warnings received from economists the UK voters voted for ‘leave’, paving the way for Brexit. This thesis reviews some possible alternatives regarding the UK-EU relationship post Brexit and concludes that the economically best case scenario would be for the UK to replace their current EU membership with an EEA agreement outlined as the one today enjoyed by Norway. The authors then uses the best case scenario alternative to estimate the loss in UK trade in goods with the EU. The estimation is done using a modified gravity model. Through the empirical study the authors find that leaving the EU and entering into an EEA agreement will heavily reduce the UK’s trade in goods with the EU.

En av de mest uppmärksammade politiska händelserna under 2016 var den brittiska folkomröstningen gällande Storbritanniens framtid i den Europeiska Unionen. Trots många varningar från nationalekonomer vann lämna-sidan, ett resultat som banar väg för Brexit. Den här uppsatsen går igenom några möjliga alternativ för det framtida förhållandet mellan UK och EU och fastställer att det ekonomiskt vore bäst för UK att ersätta sitt nuvarande EU-medlemskap med ett EES-avtal utformat som det Norge idag åtnjuter. Författarna använder en modifierad gravitationsmodell för att undersöka förlusten i varuhandel från UK till EU. Genom den empiriska undersökning finner författarna att lämna EU och ersätta avtalet med ett EES-avtal skulle minska brittisk varuhandel med EU kraftigt. (Less)
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author
Andersson, Sofie LU and Nilsson, Frida
supervisor
organization
course
NEKH03 20162
year
type
M2 - Bachelor Degree
subject
keywords
Brexit, European Union, the UK, European Economic Area, Trade, Gravity Model
language
English
id
8903598
date added to LUP
2017-02-22 11:14:08
date last changed
2017-02-22 11:14:08
@misc{8903598,
  abstract     = {One of the most debated political events during 2016 was the referendum regarding the United Kingdom’s future in the European Union. Despite the many warnings received from economists the UK voters voted for ‘leave’, paving the way for Brexit. This thesis reviews some possible alternatives regarding the UK-EU relationship post Brexit and concludes that the economically best case scenario would be for the UK to replace their current EU membership with an EEA agreement outlined as the one today enjoyed by Norway. The authors then uses the best case scenario alternative to estimate the loss in UK trade in goods with the EU. The estimation is done using a modified gravity model. Through the empirical study the authors find that leaving the EU and entering into an EEA agreement will heavily reduce the UK’s trade in goods with the EU.

En av de mest uppmärksammade politiska händelserna under 2016 var den brittiska folkomröstningen gällande Storbritanniens framtid i den Europeiska Unionen. Trots många varningar från nationalekonomer vann lämna-sidan, ett resultat som banar väg för Brexit. Den här uppsatsen går igenom några möjliga alternativ för det framtida förhållandet mellan UK och EU och fastställer att det ekonomiskt vore bäst för UK att ersätta sitt nuvarande EU-medlemskap med ett EES-avtal utformat som det Norge idag åtnjuter. Författarna använder en modifierad gravitationsmodell för att undersöka förlusten i varuhandel från UK till EU. Genom den empiriska undersökning finner författarna att lämna EU och ersätta avtalet med ett EES-avtal skulle minska brittisk varuhandel med EU kraftigt.},
  author       = {Andersson, Sofie and Nilsson, Frida},
  keyword      = {Brexit,European Union,the UK,European Economic Area,Trade,Gravity Model},
  language     = {eng},
  note         = {Student Paper},
  title        = {What can fixit after Brexit? An empirical study of the economic effect on UK trade, following an exit from the European Union},
  year         = {2016},
}