Trade-related effects of Brexit. Implications for Central and Eastern Europe

Jan Hagemejer, Maria Wąsowicz (), Jan Michałek () and Jacek Szyszka ()
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Maria Wąsowicz: European Movement Forum
Jacek Szyszka: Faculty of Economic Sciences, University of Warsaw

No 2021-17, Working Papers from Faculty of Economic Sciences, University of Warsaw

Abstract: We use a global computable general equilibrium (CGE) model to analyze several scenarios of Brexit to assess it on the EU New Member States (NMS) to complement the literature exist. Our scenarios are based on expected outcomes of the negotiations, ie. the Soft Brexit with a limited FTA and a Hard Brexit governed by WTO MFN rules. The shocks imposed on the CGE model include modifications of both tariff and non-tariff barriers. While the former is based on actual tariff data, the latter are estimated using an econometric model for both merchandise trade and services. Our results show the macroeconomic effects of Brexit are mild with a slight decline of NMS GDP of roughly 0.4 % even in the case of a Hard Brexit. However, there are some sectors that may experience somewhat significant drops in output, in particular the food sector and some other manufacturing export-oriented sectors.

Keywords: CGE modelling; international trade; Brexit; trade policy (search for similar items in EconPapers)
JEL-codes: F10 F13 F17 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2021
New Economics Papers: this item is included in nep-cmp and nep-int
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https://www.wne.uw.edu.pl/index.php/download_file/6634/ First version, 2021 (application/pdf)

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Working Paper: Trade-related effects of Brexit. Implications for Central and Eastern Europe (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:war:wpaper:2021-17

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