Macroeconomic Effects of Brexit on the Economy of Britain
There are both macroeconomic and microeconomic effects of Brexit on the economy of Britain. There have been numerous trials to version the macroeconomic results of Brexit. In this case, it is determined that there will be continued loss of Gross Domestic Product (GDP) for the Britain economy when equated with the status quo forecasts of continuing fully in the European Union (EU) and its single market (Sampson, 2017). It is important to put more emphasizes on the fact that the GDP will only reduce due to the lack of the benefits Britain could be getting as a member of the European Union.
Macroeconomic Effects of Brexit on Jobs and Public Finances
On the side of macroeconomic effects of Brexit on the economy of Britain due to negative impacts on some factors such as jobs and public finances. The fact that there is a reduction of Gross Domestic Product (GDP), it will further, in macroeconomic perceptions, indicate a reduced level of job opportunities in the United Kingdom economy. Demand from fellow European Union nation’s forms approximately 11% of ultimate demand for United Kingdom services and goods and this interprets into approximately 2.9 million jobs (Dhingra & Overman, 2017). This does not imply that those jobs opportunities are certainly at danger from Brexit. However, there are some industries of operation in which losses of jobs are probable, and others where there could be rise in jobs from Brexit, in the two scenarios relying on what substitutes the present preparations. Some employment losses are probable in the London City, as numerous agents have revealed, while main exporters like the manufacturers of automobile could be required to economize if barriers to exporting to the European Union rise.
Micrtoeconomic Effects of Brexit on Job Opportunities
Similarly, there is various import competing sectors, which can be anticipated to experience increase in job opportunities. In this case, if they withdraw from the European Union it indicates that they get extra competitive, either due to a fresh trade organization increasing the charges of imports or due to the aspect of having avoided legislations that bar their competitiveness (Bulmer & Quaglia, 2018). In this case, it is seen the job opportunities in Britain may either increase or reduce, which has either positive or negative economic impact depending on what will happen. The United Kingdom has become gradually dependent on the service industry, mutually as the major source of job opportunity foundation and as an engine of export demand.
Impact of Brexit on Public Finances
On the point of public finances, the undeviating consequence of Brexit on the public funds will be to permit the United Kingdom to save on its present payments into the United Kingdom budget. Any reserves from straight contribution to the European Union budget would be eliminated if Brexit leads to Gross Domestic Product loss of as low as 1% point and the public funds would be negatively affected if the loss is superior, in spite of having ended payments into the European Union (Belke & Gros, 2017). On a different point, it has been determined in general consensus that after some long period, Brexit will make Britain poorer since it will establish fresh barriers to immigration, foreign direct investment, and trade.
Conclusion
In summation, the economy of Britain will experience both macroeconomic and microeconomic effects due to Brexit. The United Kingdom gross domestic product is expected to reduce due to the impact of some elements such as reduction of job opportunities in the country. On a different point, it is reflected that United Kingdom will become poor due to the establishment of new obstacles to immigration, foreign direct investment, and trade. For example, creating barriers to foreign direct investment means cutting off the source of money Britain acquires from foreign direct investment (Begg & Mushövel, 2016). This also has an additional negative influence on the economy due to reduction of the available job opportunities in the country.
References
Begg, I., & Mushövel, F. (2016). The economic impact of brexit: jobs, growth and the public finances.
Belke, A., & Gros, D. (2017). The economic impact of Brexit: Evidence from modelling free trade agreements. Atlantic Economic Journal, 45(3), 317-331.
Bulmer, S., & Quaglia, L. (2018). The politics and economics of Brexit.
Dhingra, S., & Overman, H. (2017). Local economic effects of Brexit. National Institute Economic Review, 242(1), R24-R36.
Sampson, T. (2017). Brexit: the economics of international disintegration. Journal of Economic Perspectives, 31(4), 163-84.
