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The Brexit vote, economics, and economic policy

Author

Listed:
  • Paul Johnson
  • Ian Mitchell

Abstract

Economics was front and centre during the run-up to the June 2016 referendum on the UK’s membership of the European Union and economists were almost unanimous that leaving would make the UK economically worse off than otherwise. Still, in the 6 months since the referendum, there has been little discernible impact on macroeconomic variables beyond a fall in the value of the pound, and the economics profession has been criticized for being overly gloomy in its predictions. This article offers some immediate reflections on the state of the economy in the run-up to the vote, on the forecasts of economists during the campaign, and on the changes to policy since. The lack of an immediate recession has been taken as evidence that the economics was wrong, but it is not evidence that leaving the EU will be economically harmless. Despite fiscal and monetary loosening most forecasters still expect growth to be slower than otherwise over the medium term. The vote and debate around it does offer some challenges for economics and we conclude with five lessons for the profession.

Suggested Citation

  • Paul Johnson & Ian Mitchell, 2017. "The Brexit vote, economics, and economic policy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 33(suppl_1), pages 12-21.
    • Handle: RePEc:oup:oxford:v:33:y:2017:i:suppl_1:p:s12-s21.
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    File URL: http://hdl.handle.net/10.1093/oxrep/grx017
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    Citations

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    Cited by:

    1. Nattavudh Powdthavee & Anke C. Plagnol & Paul Frijters & Andrew E. Clark, 2019. "Who Got the Brexit Blues? The Effect of Brexit on Subjective Wellbeing in the UK," Economica, London School of Economics and Political Science, vol. 86(343), pages 471-494, July.
    2. Georgios Kavetsos & Ichiro Kawachi & Ilias Kyriopoulos & Sotiris Vandoros, 2021. "The effect of the Brexit referendum result on subjective well‐being," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 184(2), pages 707-731, April.
    3. Stephen Drinkwater & Colin Jennings, 2022. "The Brexit referendum and three types of regret," Public Choice, Springer, vol. 193(3), pages 275-291, December.
    4. Kuang, Pei & Luca, Davide & Wei, Zhiwu & Yao, Yao, 2023. "Great or grim? Disagreement about Brexit, economic expectations and household spending," LSE Research Online Documents on Economics 119200, London School of Economics and Political Science, LSE Library.
    5. Powdthavee, Nattavudh & Plagnol, Anke C. & Frijters, Paul & Clark, Andrew E., 2017. "Who Got the Brexit Blues? Using a Quasi-Experiment to Show the Effect of Brexit on Subjective Wellbeing in the UK," IZA Discussion Papers 11206, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    EU; macroeconomic policy; public finance; trade; economic integration; EU referendum;
    All these keywords.

    JEL classification:

    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • F15 - International Economics - - Trade - - - Economic Integration

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