Assessing the Economic Risks from Brexit - Professor Jagjit Chadha

TL;DR

Leaving the EU would have a negative impact on the UK economy, leading to lower GDP growth and increased uncertainty.

Transcript

good evening welcome thanks for coming out on this gorgeous summer's day this is being recorded so someone at some point in the future will say it must've been a lovely day for June the 2nd 2016 and of course you all know that it was I'm delighted to address you this evening upon ours in actually is the 70th anniversary of the establishment of the ... Read More

Key Insights

• 🥺 Leaving the EU would lead to increased risk and uncertainty for the UK economy, with potential negative impacts on investment, consumption, and productivity.
• 😘 The short-term impacts include a depreciating sterling, temporary inflation, and lower GDP growth.
• 🍉 The long-term impacts depend on the trading regime that is established, with potential negative effects on trade, investment, and productivity.

Questions & Answers

Q: What are the potential short-term impacts of the UK leaving the EU?

The short-term impacts include increased uncertainty, depreciation of the sterling, and negative effects on investment and consumption. There may also be a temporary inflation due to the depreciation.

Q: How would leaving the EU impact long-term economic growth?

Leaving the EU would result in lower GDP growth in the long run due to increased trade costs and potential negative effects on productivity. There may also be negative impacts on foreign direct investment and financial services.

Q: How would leaving the EU affect risk sharing and the distribution of income?

Leaving the EU could impact risk sharing and the ability to smooth consumption through trade and financial integration. The distribution of income could also be affected, with potential implications for different income brackets.

Q: What are the potential upside and downside risks of leaving the EU?

Upside risks could include further deregulation and the ability to adopt a more optimal migration regime. Downside risks include large productivity effects and the potential need for increased capital and liquidity requirements for financial institutions.

Summary & Key Takeaways

• The speaker discusses the economic question of the UK's membership in the EU and the upcoming referendum.

• Uncertainty surrounding the referendum has already impacted the UK economy, and leaving the EU would result in a costly reorientation.

• The impacts on the economy include effects on trade, financial services, and overall economic growth.