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Brexit reduced UK GDP by 6-8%, investments by 12-18% [pdf]

https://www.nber.org/system/files/working_papers/w34459/w34459.pdf
107•jnord•1h ago

Comments

nrhrjrjrjtntbt•30m ago
That would make sense. Less trade. Fewer workers in UK etc. Was it worth it?

(Dont know... dont have too much dog in fight)

femiagbabiaka•27m ago
No
A_D_E_P_T•22m ago
> Was it worth it?

Though I know yours is a rhetorical question, I'll answer: No. Brexit was essentially an anti-immigration and pro-deregulation movement. Simple small-c conservatism. (It was also anti-status-quo, but that was implicit.)

The, uh, "Conservatives" who were tasked with implementing Brexit supercharged immigration and, with considerable assistance from the EU, doubled down on ridiculous social and business regulations, paperwork, and red tape. There was no upside. They just made everything much worse. I know that they expected the Brexit vote to fail, and I think there's a term for their subsequent actions: "Malicious compliance."

Now England is a powder keg if there ever was one. If things are going to kick off, it'll happen there first. As Weimar as America is these days, England is worse.

TheOtherHobbes•16m ago
The immigration betrayal was obvious to anyone familiar with UK history.

It's how the ruling class works. They import cheap labour from the (former) colonies to drive down wages. Then they pay their puppet politicians to hyperventilate about how terrible immigration is, how filthy these foreigners are, and how it Must Be Stopped.

It's been happening for centuries - the same scam, over and over.

A_D_E_P_T•8m ago
Are you joking?

Estimates are that between 1870 and 1913 net emigration of British citizens averaged about 131,000 per year, i.e. more people left the UK than arrived:

>https://docs.iza.org/dp81.pdf

In the 1881 census of England and Wales, "natives of foreign states" were 174,372 people, just 0.671% of the population.

In the 19th century, England was a country of emigrants, with net migration at roughly -100k/year. From 2014–24, you're looking at typically +200k to +900k per year. This is totally unprecedented to put it mildly. And now, like it or not, I'm sure that things are going to get ugly.

simonw•18m ago
As a British citizen I also lost the right to live and work in 27 countries in the EU. Thanks for that.
epistasis•7m ago
If you're an older person who's secure and has a pension and whose biggest problem is fear of other people, then this costs you almost nothing and probably alleviates your fears.

If you're younger, heeeeeeelllllllll no.

david38•28m ago
GDP is a meaningless measure for all but governments and the very elite.

How about some metrics on issue that led to Brexit?

grokys•25m ago
Racism has increased, yes. https://www.bbc.com/news/articles/cp3vg33nje4o
werds•25m ago
The metrics for that were pretty much: 2 World Wars and 1 World Cup.
yongjik•24m ago
I remember someone on HN complaining that there were places selling authentic Polish sausages in London, and somehow it sounded they were deeply unhappy about it.

I don't know if average Londoners can still afford authentic Polish sausages, but if they can't, I hope the original commenter is happy now.

newfriend•23m ago
But what about the food though!
Tade0•8m ago
Poland's GDP per capita went from less than 20% that of the UK in 2005 to 38-48% currently depending on source.

Those sausages have only become less affordable.

georgeecollins•24m ago
>> GDP is a meaningless measure for all but governments and the very elite.

Source?

The top three GDP per capita are: Lichtenstein, Luxembourg, Bermuda. The bottom three are: Afghanistan, Yemen, South Sedan. As an average person I would rather live in the top countries of the list than the bottom but that's just anecdote.

ttoinou•21m ago
Taking maximas and minimas is only saying that the scale of GDP figures is interesting to look at. Like does it have 3 figured or 6 figures ? But that metric is easily done with others measures than GDP.

And yeah, if you study GDP its easy to see it’s a giant scam and the economy cannot be put into numbers. Qualities are better than quantities

ekhaliul•18m ago
Well this just tells you that if you play by someone else's rules you get money and investment pouring in and GDP going up. If you don't then its the opposite. The main question is do you prefer to play by your own rules or rules imposed by investment interests.

Edit: For an average person its not always true that an illusion of prosperity is always good. Eventually there might be a payback for all this capital.

christophilus•17m ago
Your point is a serious one, and well taken. But “South Sedan” made me smile. Seemed like a reference to rusting sedans on cinder blocks in the low-gdp rural south.
Hikikomori•17m ago
I steal all your shit, you get reimbursement from insurance, gdp goes up.
make3•15m ago
this is such a bad way to evaluate a metric. we want something that can distinguish small percentage changes in affordability for the people who live there
ipaddr•3m ago
The average citizen in those places do not reap the rewards. Those places are countries where laws are built for the rich and to shield money. GDP is not a great measure for the average person unless communism is fully realized.
xdennis•3m ago
I don't know why people are being to negative towards GP. (Maybe because he didn't argue his point?) It's well known that GDP is not a good measurement for common people.

You can have a rich elite and a high GDP, but that doesn't mean the common people are doing as well as the GDP suggests.

A good example of this is Ireland. It has a huge GDP. 129,132$ per capita. It's the 3rd richest country in the world if you look at it like that (Liechtenstein and Luxembourg are first and second).

But do you think the average Irishman actually makes 129,132$ per year? No. Ireland is a tax heaven and its artificially inflated by tax shenanigans from foreign multinationals.

There are other reasons why absolute GPD is bullshit. Even PPP GDP is a little bullshit.

tomlockwood•20m ago
If you have a look at figure 2 here: https://migrationobservatory.ox.ac.uk/resources/briefings/lo...

You'll see that immigration was at record levels post Brexit.

skywhopper•13m ago
What issue is that? Propagandistic, lying media spreading misinformation to the public as corrupt politicians, being paid off by malign foreign actors intent on destroying the influence and power of Britain on the world stage?

Yes, let’s see some details on that.

naIak•28m ago
The same people who tell you that GDP means nothing to the average person and that investments only go to the rich will tell you that Brexit was bad because it reduced GDP and investments.
Zigurd•12m ago
OK let's look at other measurements: Did Brexit increase UK soft power? Did Brexit increase cultural exchanges? Was Brexit good for the universities? Is the food better and more wholesome? Was racism reduced?
GenerWork•8m ago
>Is the food better and more wholesome?

Why do people always focus on food in these discussions? It's such a weak argument.

mmooss•3m ago
It's not highly consequential, but it's a powerful representation that everyone can understand.

Something the GP omitted: Recently, weren't there supply and inflation issues regarding food?

Of course, many in the land of kidney pies might be just as happy either way. :)

mmooss•5m ago
Most of those are in the same class - not things that directly affect many people. Most people in the UK don't know what 'soft power' is (I'm not being condescending; most people don't get into international relations on that level of detail) and its effect is indirect. How many people are directly affected by the quality of universties? - of the population that attends, many are just as happy regardless and aren't concerned with world-class professors and research.

Brexit can be a bad idea and at the same time the GP can have a good point about globalization.

broodbucket•11m ago
I'm pretty sure people will tell you that Brexit was bad for a laundry list of other reasons too that do very much directly affect the average person
rhaps0dy•26m ago
Yeah, but long term it will increase GDP due to the UK being able to have better (fewer) regulations than those allowed by the EU. It does require Parliament getting it together.
bad_haircut72•24m ago
Enjoy your chlorinated chickens guv!
rhaps0dy•19m ago
I'm vegan, I don't eat tortured animals. Thanks though.
colechristensen•22m ago
Ok but the current vibe in the UK is Parliament wants to watch you while you sleep so they can judge your worthiness. Not exactly an "efficient regulations" regime.
rhaps0dy•20m ago
Yeah, that's fair. There's hope though!
A_D_E_P_T•15m ago
> There's hope though!

Where would that be? The Stuart heir isn't interested in the job, and Divine Intervention probably isn't on the table. Reform Party? Oh, come on...

advisedwang•15m ago
The UK will get 6% GDP recovery from curved bananas alone!
skywhopper•12m ago
It won’t matter if no one can move there to take advantage of this libertarian utopia, which by the way is a bizarre fantasy lie.
TheOtherHobbes•9m ago
This is just naive.

The EU is still a major trading partner, and regulatory divergence would kill trade, not increase it.

Elsewhere, the only way fewer regulations would increase GDP would be if the UK was selling goods and services that benefited from lower standards.

It already does that, because tax evasion and money laundering are a significant part of GDP.

But there are very, very few areas in normal international trade where buyers want to see looser regs and lower standards.

As an argument, it's just incoherent.

JumpCrisscross•5m ago
> long term it will increase GDP due to the UK being able to have better (fewer) regulations than those allowed by the EU

Speaking from finance view, the trade from Britain has been moving capital out for years. Not in. The stock market has shrunk,

If real deregulation comes at some point, maybe the curve changes. That remains unlikely, however, given to export anything the UK would have to meet their importers’ (read: America and Europe’s) standards.

(The benefits of deregulation are absolutely swamped by the benefits from trade. This inequality grows the smaller your economy is relative to your trading partners’.)

jasoneckert•24m ago
I'm assuming this was posted to draw a parallel with current U.S. international policy, such as tariffs and protectionist measures, which share some fundamental similarities with Brexit.
ares623•19m ago
Hopefully it leads to more investments in other places. That way the voters will eventually get what they want in a monkey’s paw way. Less immigration because the home countries get more investments and more opportunities.
mmooss•11m ago
The NY Times had an interesting article in the last week about Vietnam, which continues to embrace globalization, and with good results.
ares623•6m ago
Do you mean it turns out America was already great (despite still having some problems) and that’s why the whole world was flocking to it. In fact, it was so great that it was sucking up potential greatness from other countries.
advisedwang•17m ago
The paper just came out. I would assume they're posting it because it's interesting to a generally economically curious audience, and Brits in particular. No need for posting to be some targeted snipe at America.
justinzollars•15m ago
someone needs a Jump to Conclusions Mat
LightBug1•8m ago
Painful seeing it in numbers. And people wonder why the UK is struggling ...

It's a fucking mystery, isn't it ...

dakial1•6m ago
Proving that another thing extremists share (on whatever side) is the total lack of economic sense.
standardUser•5m ago
I honestly believed that Britain would find a way to hold a second referendum before Brexit, given that the polling almost universally favored "remain" after the vote, and the vote itself was so close (52% to 48%). Now what surprises me is the lack of enthusiasm for Scottish independence (62% voted to remain), though I can't claim to keep up on Scottish politics. Maybe someone knows?
mmooss•2m ago
52-48 is a reasonably solid win in elections.
jmyeet•4m ago
These are the dying days of neoliberalism where only a fasicst police state is capable of propping it up.

The core problem here, and pretty much everywhere else, is rising inequality. We have seen a truly massive wealth transfer from the poor to the rich (either directly or via the government) and we're rapidly reaching the point where the poor simply won't have anything left.

Post-GFC austerity measures have been an abject failure. Successfully blaming those failures on immigration (as what became the Reform movement did) directly led to Brexit because neoliberalism in the UK is uniparty. So here we are where Nigel Farrage is odds on favorite to be the next Prime Minister of the UK (barring whatever leadership coups take place in Labor in until the next election, at least 1 of which is expected).

So the problems of neoliberalism are blamed on migrants. There is no counter-narrative to that. So we see a rise in isolationism and nationalism. And nothing improves. Well done, the system works.

What I find particularly fascinating is that many who push this agenda fetishize the 1950s (particularly in the US), which is funny because there was vastly less inequality and the marginal tax rate (in the US) was 91%.

Switzerland and Norway have better navigated being on the edge of the EU but not in it. But Norway has vast oil reserves (and, to their credit, is using them for a sovereign wealth fund instead of minting a handful of billionaires). Switzerland was the banking center but is really losing that title. Britain was once the heart of a vast empire and it too is a financial hub and a center for international money laundering (ie real estate) but, much like Switzerland, it doesn't really produce anything anymore.

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