Brexit Uncertainty and Trade Disintegration

Graziano, Alejandro; Handley, Kyle; Lim�o, Nuno

Abstract

We estimate the uncertainty effects of preferential trade disagreements. Increases in the probability of Britain’s exit from the European Union (Brexit) reduce bilateral export values and trade participation. These effects are increasing in trade policy risk across products. We estimate that at the average disagreement tariff of 4.5% the increase in the probability of Brexit after the referendum lowered EU-UK bilateral export values between 11-20%. Neither the EU or UK exporters believed a trade war was likely.

Citation

Graziano, A., Handley, K., & Limão, N. (2021). Brexit Uncertainty and Trade Disintegration. Economic Journal, 131(635), 1150–1185. https://doi.org/10.1093/ej/ueaa113

• Journal Article Type: Article
• Acceptance Date: Aug 31, 2020
• Online Publication Date: Sep 26, 2020
• Publication Date: 2021-04
• Deposit Date: Nov 5, 2020
• Publicly Available Date: Sep 27, 2022
• Journal: Economic Journal
• Print ISSN: 0013-0133
• Electronic ISSN: 1468-0297
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 131
• Issue: 635
• Pages: 1150–1185
• DOI: https://doi.org/10.1093/ej/ueaa113
• Keywords: Economics and Econometrics
• Public URL: https://nottingham-repository.worktribe.com/output/5019983
• Publisher URL: https://academic.oup.com/ej/advance-article-abstract/doi/10.1093/ej/ueaa113/5912355?redirectedFrom=fulltext
• Additional Information: This is a pre-copyedited, author-produced version of an article accepted for publication in Economic Journal following peer review. The version of record Alejandro G Graziano, Kyle Handley, Nuno Limão, Brexit Uncertainty and Trade Disintegration, The Economic Journal, , ueaa113 is available online at: https://doi.org/10.1093/ej/ueaa113.