The economic consequences of the Brexit vote

Abstract

On June 2016, the British people voted to leave the European Union. This unexpected result provides us with the opportunity to study the impact of the vote on the economy. We replicate the work done by Born et al. (2017) by applying the synthetic control methods to capture the effect of the vote on different economic variables: firstly on the GDP, later on its components, following the National Accounts. We find proof of an output loss of around 3%, which comes mainly from households consuming less, firms investing less and the British Government spending less. Regarding the balance of trade, we do not find significative changes neither on imports nor ir exports.