Policy makers, pundits, and investors have spent several months anxiously monitoring the vital signs of the British and European economies, trying to divine the ramifications of the UK’s potential departure from the European Union. Stock prices have largely recovered, while the pound remains low. Some analysts have raised their predictions for the UK’s short-term economic growth but lowered expectations for long-term growth. Meanwhile, the date and terms of the departure remain in doubt. Nonetheless, European economists find room for broad agreement on at least one aspect of Brexit: its likely effect on incomes in the UK.
Chicago Booth’s Initiative on Global Markets has assembled a panel of European economic experts, consisting of 50 economists from 27 major universities and business schools. And in one of the panel’s inaugural polls, 80 percent of respondents agree that the Brexit decision will in 10 years leave real per-capita incomes in the UK lower than they otherwise would have been. Brexit was one of six initial topics the IGM asked its European experts about for the new panel, which launched this week.
The European economists polled expressed even more pessimism toward Brexit’s effects on income than US-based economists did when responding to the same question. IGM put the question to its original Economic Experts Panel in the days immediately following the Brexit vote.