The Post-Brexit European Union
The European project has never suffered a setback like the UK’s decision to Brexit, and questions over the very future of the project must be asked in the wake of this reality in which one of the EU’s major powers has decided to opt out. While it is too soon to expect detailed studies on the full consequences of Brexit, the situation can be analysed using the data we already have: the economic and legal framework that exists between the UK and the EU. Through this lens, we can look at the possible future relationship between the two actors and perhaps better understand how they grew apart. This Forum examines Brexit from a variety of angles, ranging from London’s status as the financial centre of Europe to intra-EU migration to the very future of the European project.
Figure of the Month
The Ageing of the OECD
This figure from Tim Vlandas's article “The Political Effect of Ageing on Inflation” shows the rising share of the elderly in the populations of OECD countries, and provides a springboard for his fascinating thesis on how this affects monetary policy.
Click on the figure for additional information.
Letter from America
The US Presidential Candidates and the Economy
While it is sometimes difficult to remember that policy is actually relevant in the current US presidential campaign, whoever wins the vote in November will grab the reigns of the world's biggest economy for the next four years. Leonard Burman attempts to make some sense of what a Donald Trump or Hillary Clinton presidency would look like from an economic policy point of view.
New Models of Economic Integration for Turkey and the UK
Turkey's relationship with Europe is broken. The ultimate goal of accession that had underpinned this relationship has lost both its relevance and its credibility. Sinan Ülgen predicts what sort of relationship is possible between the two in the future. Surprisingly enough, he argues that the UK’s secession from the EU may actually strengthen Turkey’s bargaining position with the European Union.
The Political Effects of Ageing on Inflation
The trade-off between inflation and unemployment has long been a feature of macroeconomic dialogue. Most political economy accounts emphasise the role of ideas and institutions in determining a country's inflation rates, noting in particular that countries with independent central banks achieve lower inflation. Tim Vlandas argues that this conventional wisdom downplays the importance of interests, ignoring the significant influence that a growing electoral group – the elderly – has on inflation.
Quote of the Month
What Future for the EU After Brexit?
“It is not clear, for example, whether the UK will be able to maintain free movement of services with the EU, as this freedom is intimately linked to the free movement of people. However, that is a problem for the Brits, should they choose to embrace full sovereignty.”
from Paul De Grauwe's "What Future for the EU After Brexit?"
A Modest Proposal for Resolving the Eurozone Crisis
Before his controversial six-month stint as Greece's Finance Minister, Yanis Varoufakis detailed in Intereconomics his proposal for overcoming the eurocrisis. He argued that his policies could be implemented immediately and require none of the moves such as national guarantees or fiscal transfers to which many Europeans are opposed, nor moves towards federation that entail Treaty changes, which electorates are most likely to reject. He juxtaposed his proposal with "the false dilemmas that currently impede clear thinking and immobilise Europe's policymakers".
What Future for the EU After Brexit?
While much attention has been given to the fate of Britain in the wake of Brexit, the future of the EU is more important than the decision of one country to leave. The EU faces a number of problems, and Paul De Grauwe writes that its actions in the forthcoming Brexit negotiations hold the key to the EU's future strength as a political actor. While it is tempting to allow the UK concessions on migration in order to keep this major economy within the Single Market, it is more important to hold true to the EU’s core freedoms of movement of goods, services and people.