Thursday, 29 June 2017

Trade and the Gains from Diversity: Why Economists Failed to Predict the Consequences of Brexit

In this brief article I explain why the expectation amongst economists that Brexit means Britain will experience significant economic losses, thanks to the reversal of the gains from specialisation, is incorrect. The background assumptions regarding comparative advantage are false and cannot inform real-world situations. However, this is not the same as to suggest Britain as a post-Brexit country will follow successful trade policies.
~Steve Keen

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