Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
My question is whether the estimates of no-deal Brexit economic damages include second order effects.

For example, if shipping is delayed, it will be harder to get food into the store, so the store shelves will be bare, then food hoarded. Presumably this would lead to some (expensive) emergency plan being put into place to return the food delivery system back to the capability it had before.

A secondary effect might be that consumers will still be worried about the food supply, and so will continue hoarding and other atypical practices even after the original delivery capability has been restored.

Then a tertiary effect, maybe, is that while searching for hard-to-find food, people may put additional load on the fuel supply system, etc.

Considering what happens with a fairly minor event like a predicted snowstorm, which also only goes on for a few days, it seems as if a no-deal Brexit would be likely to show considerable economic damage, much more than the few percentage points predicted in the newspapers.

by asdf on Mon Jan 7th, 2019 at 03:36:16 PM EST
The most immediate effect of a hard Brexit on headline GDP would probably be the movement abroad of trillions in assets by London based banks financial services companies. The disruption of JIT production processes and movement of time sensitive fresh produce would be secondary to this. I don't think there has even been a serious attempt to estimate tertiary effects.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Jan 7th, 2019 at 04:45:49 PM EST
[ Parent ]
Apparently the UK generally uses April as the start of the fiscal year. So at least there will be a clean break, paperwork-wise.

https://en.wikipedia.org/wiki/Fiscal_year

by asdf on Mon Jan 7th, 2019 at 08:20:16 PM EST
[ Parent ]
I don't think there has even been a serious attempt to estimate tertiary effects.

If those in charge of setting up such analysis had the wit to consult, rather than dismiss, experts, they would discover that analysis of a complex multi-dimensional interconnected non-linear system, subject to multiple disturbance, is futile. They call such analysis "Chaos Theory" for a good reason.

A simple example of unexpected consequences is the stoppage, in Summer 2018, to production of beer, fizzy drinks, muffins and threats to supply of poultry and pig meat when multiple Carbon Dioxide plants closed at the same time for maintenance.

That was one disturbance. The default legal position is that on 29th March UK loses multiple supply agreements and disturbs multiple supply chains. We would then discover the consequences but never fully analyse the causes and interconnections.

Predictions vary from "It's all project fear to concentrate the minds, so it will be 'all right on the night'", through "Britain - The Venezula of the North" to "Civil War".

I am to the right hand side of that spectrum (if there is "no deal").

I am no 'expert'. I have just stumbled across a few buzz words

by oldremainmer48 on Tue Jan 8th, 2019 at 10:14:28 AM EST
[ Parent ]

Display:

Occasional Series