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Real Effects of Uncertainty: Evidence from Brexit

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Abstract
In the historic Brexit referendum on June 23, 2016, U.K. citizens voted in favor of leaving the European Union (EU), a result that created substantial uncertainty regarding the future economic relationship between the United Kingdom and the EU. As can be seen in Figure 1, uncertainty, measured by the Economic and Policy Uncertainty (EPU) index of Baker et al. (2016), spiked around the Brexit referendum date and has remained elevated relative to its pre-referendum levels since then.

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  • Anna Lipinska & Musa Orak, 2020. "Real Effects of Uncertainty: Evidence from Brexit," FEDS Notes 2020-05-11, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfn:2020-05-11
    DOI: 10.17016/2380-7172.2536
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    File URL: https://www.federalreserve.gov//econres/notes/feds-notes/real-effects-of-uncertainty-evidence-from-brexit-20200511.htm
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