Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/173056
Authors: 
Born, Benjamin
Müller, Gernot
Schularick, Moritz
Sedláček, Petr
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6780
Abstract: 
The unexpected outcome of the Brexit vote in June 2016 provides a rare macroeconomic experiment to study the aggregate consequences of a sudden change in expectations regarding future economic prospects. Using synthetic control methods, we show that forward looking households and businesses lowered spending in response to the vote, causing an output loss of more than 1 percent. Heightened economic policy and macroeconomic uncertainty explain close to half of the observed output loss. But a large part of the consequences of the vote also reflects a downgrade of expectations about long-run income, not only a wider dispersion of potential outcomes.
Subjects: 
Brexit
European Union
synthetic control method
VAR
anticipation effects
economic policy uncertainty
macroeconomic uncertainty
JEL: 
E65
F13
F42
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.