The Costs and Benefits of Leaving the EU
CFS Working Paper No. 472
18 Pages Posted: 8 Oct 2014
Date Written: May 13, 2014
What would be the economic effects of the UK leaving the European Union on living standards of British people? We focus on the effects of trade on welfare net of lower fiscal transfers to the EU. We use a standard quantitative static general equilibrium trade model with multiple sectors, countries and intermediates, as in Costinot and Rodriguez-Clare (2013). Static losses range between 1.13% and 3.09% of GDP, depending on the assumptions used in our counterfactual scenarios. Including dynamic effects could more than double such losses.
Keywords: Trade, European Union, welfare
JEL Classification: F13, F17, F60
Suggested Citation: Suggested Citation