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Vox article: The Pound and the Macroeconomic Effects of Brexit, by Giancarlo Corsetti and Gernot Müller

last modified Jun 20, 2016 02:32 PM

 

The Pound and the Macroeconomic Effects of Brexit

Giancarlo Corsetti and Gernot Müller

18 June 2016

For decades, the UK government has been very careful in ensuring a low-risk status for its public and private debt. This column warns that if the UK opts to leave the EU, uncertainty over the implications of Brexit would put this low-risk status in jeopardy. A depreciation of the pound could well generate an export boom, but this would not compensate for the damage to internal demand and to the UK’s ability to access external financing of its deficits.

 

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