The impact of brexit on foreign investment and production

Ellen R. McGrattan, Andrea Waddle

Research output: Contribution to journalArticle

1 Scopus citations

Abstract

Using simulations from a multi-country neoclassical growth model, we analyze several post-Brexit scenarios. First, the United Kingdom unilaterally imposes tighter restrictions on FDI and trade from other EU nations. Second, the European Uunion retaliates and imposes the same restrictions on the United Kingdom. Finally, the United Kingdom reduces restrictions on other nations during the post-Brexit transition. Model predictions depend crucially on the policy response of multinationals' investment in technology capital, accumulated know-how from investments in R&D, brands, and organizations used simultaneously in their domestic and foreign operations.

Original languageEnglish (US)
Pages (from-to)76-103
Number of pages28
JournalAmerican Economic Journal: Macroeconomics
Volume12
Issue number1
DOIs
StatePublished - Jan 1 2020

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