Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/228068
Authors: 
Opatrny, Matej
Year of Publication: 
2019
Series/Report no.: 
IES Working Paper No. 27/2019
Abstract: 
We estimate how the UK financial markets would have evolved if the Remain camp had won the referendum. To construct thecounterfactual, we use the synthetic control method. Our results suggest that there would not have been any significant change in the development of the FTSE 100 Index in the medium to long term if there had not been a referendum. On the other hand, we find a significantly negative effect of 1.2 percentage points on the 10-year bond yield. Given the geopolitical circumstances in mid 2016, financial agents investing in the pound could have sought safer investment options represented by longer-term government bonds, which consequently could result in lower bond yields.
Subjects: 
Brexit
financial markets
macroeconomic indicators
synthetic control method
JEL: 
C10
Q10
Q18
Document Type: 
Working Paper

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