Trade and foreign direct investment‐related impacts of Brexit
Journal: World Economy
Year: 2019

Abstract We offer a general‐equilibrium analysis of Brexit incorporating the state‐of‐the‐art differences in productivity and firms' selection within manufacturing sectors à la Melitz ( Econometrica , 2003, 71 , 1695) and multinationals in services. Our results suggest that trade, output and average productivity diminish across most sectors in the UK and the Rest of the European Union (REU), as well as GDP, welfare, wages and capital remuneration. However, the UK loses more due to the missing pr