This paper outlines different approaches with the aim of analysing the robustness of outcomes of the Brexit in varying model assumptions. The paper first is concerned with the methodology and gives a brief overview of the possible Brexit scenarios and summarizes the results and the appropriate robustness checks estimated by Dhingra et al. (2017). Section 5 begins by laying out theoretical approaches of the research and discusses how the results change as the models extend by GVC and network effects.
Over the past century, there has been a dramatic increase in economic integration. Policy makers continued signing trade agreements after decades of war and political isolation. In 2016, the British decided to leave the EU and initiated a turnaround in political framework. Recent developments in Europe signal that the EU could be under pressure if the consequences of leaving the EU are insignificant. Therefore, these developments have heightened the need for scientific studies on trade integration and trade disperse. The individual per capita benefits of trade liberalisation have been studied by many researchers. There is a growing body of literature that recognises new quantitative trade models and fill them with the latest input output data.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Estimations of Dhingra et al. (2017)
- Empirical Method
- Model Assumptions
- Gravity Equation
- Scenarios of Leaving the EU
- Summary of the results
- Robustness Checks
- Input-Output Data
- Empirical Method
- Critical Assessment
- Baseline Model
- Melitz Model Extension of Jafari et al. (2020)
- Aggregation Bias
- Global Value Chains
- Network effects
- Results of Cappariello et al. (2020)
- Baseline Model
- Conclusion and Outlook
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper aims to analyze the robustness of the welfare effects of Brexit using various trade models and empirical approaches. It builds upon the research of Dhingra et al. (2017), which estimated welfare losses associated with different Brexit scenarios. The paper delves into the limitations of the baseline model and investigates the potential impact of factors such as global value chains and network effects.
- Assessing the welfare effects of Brexit
- Analyzing the robustness of different trade models
- Investigating the role of global value chains and network effects
- Exploring the limitations of the baseline model used by Dhingra et al. (2017)
- Evaluating the impact of Brexit on the UK and the EU
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: This chapter introduces the topic of trade integration and the significance of the Brexit decision. It highlights the need for scientific studies on the impact of trade liberalisation and trade dispersion, focusing on the paper by Dhingra et al. (2017) and its predictions on welfare changes due to external shocks.
- Estimations of Dhingra et al. (2017): This chapter summarizes the empirical methodology used by Dhingra et al. (2017) to quantify the welfare effects of leaving the EU. It outlines the model assumptions and scenarios used to estimate the potential impact of Brexit on the UK and the EU.
- Critical Assessment: This chapter critically examines the baseline model used by Dhingra et al. (2017), discussing potential biases and limitations. It then explores the impact of extending the model to incorporate global value chains and network effects.
Schlüsselwörter (Keywords)
This paper focuses on the welfare effects of Brexit, employing trade models and empirical approaches. Key themes include trade integration, trade liberalisation, global value chains, network effects, and the Armington model. It specifically examines the research findings of Dhingra et al. (2017) and explores the robustness of their estimations.
- Quote paper
- Pascal Hlavka (Author), 2021, Costs and Benefits of Leaving the EU. Possible Brexit Scenarios and Results, Munich, GRIN Verlag, https://www.grin.com/document/1154516
