Economists say no to Brexit

Today the Times has publisheda letter about Brexit. It is short and sweet.

Focusing entirely on the economics, we consider that it would be a major mistake for the UK to leave the European Union.

Leaving would entail significant long-term costs. The size of these costs would depend on the amount of control the UK chooses to exercise over such matters as free movement of labour, and the associated penalty it would pay in terms of access to the single market. The numbers calculated by the LSE’s Centre for Economic Performance, the OECD and the Treasury describe a plausible range for the scale of these costs.

The uncertainty over precisely what kind of relationship the UK would find itself in with the EU and the rest of the world would also weigh heavily for many years. In addition, there is a sizeable risk of a short-term shock to confidence if we were to see a Leave vote on June 23rd. The Bank of England has signalled this concern clearly, and we share it.

The simplicity of the letter was deliberate, as it was designed to show the extent of the consensus among economists on this issue. In a relatively short space of time Tony Yates, Paul Levine and I got 196 signatories, most of whom are UK academic economists. (The letter was originally intended just to focus on academic economists, but others wanted to sign.)

Why bother? After all doesn’t everyone already know that nearly all economists think Brexit would have significant costs? Only yesterday NIESR publishedtheir own estimates of costs, nicely summarisedby Martin Sandbu. There are two important points here. First, a large section of the print media is committed to Brexit. Second, the BBC has pledged to be balanced, which means always matching stories about the economic cost with those who believe it will be a benefit.

Some may have noticed the disparity in the standing of those anti and pro Brexit, but equally others may have used attempts at balance to say to themselves that economists are always disagreeing and therefore dismiss warnings about costs. There are two reasons why you will never get unanimity from economists: it is a science about people and therefore inherently uncertain, and the views of a few economists are influenced by their politics. There is the jokethat if you put 10 economists in a room you get 11 opinions. Which means that when all but a handful agree about something, you can be pretty sure the theory and evidence are strongly pointing in one direction.

There is therefore a huge disparity between the overwhelming majority of economists that say we would be worse off with Brexit and the handful that say otherwise. That is as near to unanimity among economists as you will ever get.