Macroprudential policies and Brexit: A welfare analysis

Rubio, Margarita

Abstract

Brexit will have implications on financial stability and the implementation of macroprudential policies. The United Kingdom (UK) will no longer be subject to the jurisdiction of the European Systemic Risk Board. This paper studies the welfare implications of this change of regime. By means of a dynamic stochastic general equilibrium model, I compare the pre-Brexit scenario with the new one, in which the UK sets macroprudential policy independently. I find that, after Brexit, the UK is better off by setting its own macroprudential policy without taking into account Europe's welfare as a whole.

Citation

Rubio, M. (2024). Macroprudential policies and Brexit: A welfare analysis. Economic Inquiry, 62(3), 1246-1267. https://doi.org/10.1111/ecin.13214

• Journal Article Type: Article
• Acceptance Date: Feb 14, 2024
• Online Publication Date: Mar 6, 2024
• Publication Date: 2024-07
• Deposit Date: Feb 18, 2024
• Publicly Available Date: Mar 7, 2025
• Journal: Economic Inquiry
• Print ISSN: 0095-2583
• Electronic ISSN: 1465-7295
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 62
• Issue: 3
• Pages: 1246-1267
• DOI: https://doi.org/10.1111/ecin.13214
• Keywords: Brexit; DSGE; macroprudential policy; welfare
• Public URL: https://nottingham-repository.worktribe.com/output/31604916
• Publisher URL: https://onlinelibrary.wiley.com/doi/10.1111/ecin.13214
• Additional Information: This is the peer reviewed version of the following article: Rubio, M. (2024) Macroprudential policies and Brexit: a welfare analysis. Economic Inquiry, 62(3), 1246–1267, which has been published in final form at https://doi.org/10.1111/ecin.13214