Jagjit Chadha's picture
Affiliation: 
National Institute of Economic and Social Research
Credentials: 
Professor of economics

Voting history

Are academic economists ‘in touch’ with voters and politicians?

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Question 2: What do you think is the most likely reason that a majority of UK voters went against the near unanimous advice of the economics profession?

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Answer:
C. Different preferences
Confidence level:
Confident
Comment:
Those who voted for Leave were registering a protest vote about so many aspects of the recent past, from regional inequality, to the a sense of exclusion to a statement about a lack of national cohesiveness in the face of financial crisis and increasing globalisation. It was not simply a vote about the economic risks of leaving the EU.

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Question 1: Do you agree that the economics profession needs an institutional change that promotes the ability to communicate more effectively with policy-makers and the public at large and to make clear when economists have a united view; and do you agree that we need to introduce leadership to help achieve this improvement through coordinated efforts?

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Answer:
Agree
Confidence level:
Very confident
Comment:
Economics plays a dominant role in national political debates. And much time is devoted in the media to economic arguments by academics, market economists and people from lobby groups - and earlier in the Spring, the risks of leaving were probably made clear. But once the referendum was announced, and particularly when purdah was introduced, the politicians were given the upper hand, which meant that equal time was given to those on the Remain and Leave side rather than time being allocated to reflect the balance of economic arguments. We need to develop a co-ordinated approach with media that gives us more time and space to get our arguments across at times of national urgency. There is still time.

Brexit: the potential of a financial catastrophe and long-term consequences for the UK financial sector

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Question 3: What do you think will be the overall economic consequences of Brexit for the UK?

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Answer:
Mildly negative
Confidence level:
Very confident
Comment:
There will be some short run negative effects but in the long run the measured risks to trade, FDI and the fiscal position will tend to bear down on income. The final impact will depend on how well we re-orient trade to the rest of the world and how well the financial sector absorbs the shock of Exit.

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Question 2: What is the probability that the UK experiences such a significant disruption to financial markets and asset prices following a vote for Brexit on 23 June?

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Answer:
31-70%
Confidence level:
Very confident
Comment:
There would be tightening of monetary and financial conditions reflecting an increased riskiness in Sterling-based assets. Policy and the exchange rate will only be able to offset this to a partial degree and so markets will take some calming down – particularly is the vote to leave is unexpected.

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Question 1: Do you agree that there would be substantial negative long-term consequences for the UK financial sector if the UK were to leave the EU?

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Answer:
Agree
Confidence level:
Very confident
Comment:
The UK financial sector has benefitted from being part of the EU but simultaneously from the opt-out from EMU. The UK financial sector has benefitted from liquidity operations made by the ECB, from acting as an entrepot for financial services to the rest of Europe and it has been able to play a leading role in developing the new set of financial regulations. All three of these benefits may be lost under Exit.

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