People walk past a pro-Brexit protester outside the Houses of Parliament in London.

Commentary Type

Brexit Britain in a changing global economy

Photo Credit: REUTERS/Henry Nicholls

Chapter 2 in The Economics of Brexit: What Have We Learned?, Jonathan Portes, editor, June 23, 2022, London: Centre for Economic Policy Research


After the 2016 referendum but prior to the implementation of Brexit, two main points about its coming economic impact were evident (Posen 2017, 2019b). First, gravity matters. One of the few things that economics can treat as nearly a physical law is that economies trade and invest primarily with the economies that are closest to them geographically and historically. Brexit was running in the face of that. Second, Brexit would affect more than just international trade. Instead, it had to be seen in a political economy context as well as an economic context of broader EU–UK commercial interactions involving foreign direct investment, financial flows, information networks, and immigration. As has been amply documented, most economic trends post-Brexit have come out pretty much as the mainstream economists expected (Ayele et al. 2021, Bakker et al. 2022, Crowley et al. 2022, Freeman et al. 2022, Portes 2021, Sumption 2022). These studies emphasize the econometric identification of specific Brexit impacts, in keeping with current trends in economic research.

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