United Kingdom: Selected Issues
IMF Staff Country Reports, November 14, 2018
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- United Kingdom: Selected Issues
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Bibliographic details
- Published: November 14, 2018
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484384596.002
Main objective and scenarios
- Estimates the long-run economic impact of Brexit on the United Kingdom under two distinct assumptions for the post-Brexit relationship between the United Kingdom and the European Union.
- The illustrative scenarios entail:
- different degrees of higher trade costs,
- a more restricted European Union migration regime,
- reduced foreign inward investment.
Methodology
- A standard multicountry and multisector computable general equilibrium model is used to quantify the impact of higher trade barriers.
- Empirical analysis of labor mobility across sectors is conducted to assess adjustment speed.
Key findings
- There is substantial sectoral heterogeneity in the impact of Brexit.
- Regions with higher concentrations of the more affected sectors are likely to confront greater losses.
- The empirical analysis suggests the speed of sectoral labor relocation across sectors has been relatively low in the UK.
- Irrespective of empirical estimates of mobility, faster adjustment policies would reduce aggregate and individual costs.
Policy implications and recommendations
- Policies to facilitate faster adjustment to the post-Brexit equilibrium are critical. Examples highlighted:
- retraining to accelerate sectoral labor relocation and minimize associated costs to individuals and in aggregate.
Publication metadata and identifiers
- Publication date: November 14, 2018
- Pages: 68
- Volume: 2018
- Issue: 317
- Series: Country Report No. 2018/317
- DOI: https://doi.org/10.5089/9781484384596.002
- Stock No: 1GBREA2018004
- ISBN: 9781484384596
- ISSN: 1934-7685
Source: United Kingdom: Selected Issues (IMF Staff Country Reports), November 14, 2018.
Content in this bundle
- Country Report