The Collapse of EU Trade Relations: A Worst Case Scenario?

24 Pages Posted: 3 May 2019 Last revised: 8 Mar 2020

See all articles by Karen Jackson

Karen Jackson

University of Westminster

Oleksandr Shepotylo

Aston University - Aston Business School

Date Written: March 6, 2020

Abstract

This paper demonstrates the welfare implications of the differential disintegration of the EU. Using a structural gravity approach, our estimates suggest that the rest of the EU countries have much more to lose from the disintegration of the EU compared to a disorderly Brexit. At the same time, neighboring high income and middle income countries, such as Bosnia and Herzegovina and Norway, are expected to benefit from EU disintegration under some scenarios because they would increase their trade competitiveness relative to EU countries.

Keywords: Gravity model, trade policy, Brexit, EU

JEL Classification: F13, F14

Suggested Citation

Jackson, Karen and Shepotylo, Oleksandr, The Collapse of EU Trade Relations: A Worst Case Scenario? (March 6, 2020). Available at SSRN: https://ssrn.com/abstract=3351108 or http://dx.doi.org/10.2139/ssrn.3351108

Karen Jackson (Contact Author)

University of Westminster ( email )

35 Marylebone Road
London NW1 5LS
United Kingdom

HOME PAGE: http://karen-jackson.com

Oleksandr Shepotylo

Aston University - Aston Business School ( email )

Aston Triangle
Birmingham, B47ET
United Kingdom

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