Professor Bart Los has been working with an international team on calculating what the impact of Brexit will be on different regions and industries. FEB Blog caught up with him to ask why students should pay attention to this research.

Q. What do you think for students at Groningen is the biggest takeaway from your research on the impact of Brexit?

A. I think the biggest take-away is that both UK and EU countries will suffer. And I think that students should understand why international trade is so important.

But there is one other thing that is not directly related to our research, but I think it is not discussed sufficiently in the newspapers, etcetera, which is that originally the EU was set up – or, the predecessors of the EU were set up – to make sure that there wouldn’t be large wars anymore. And I think that the EU has been extremely successful in that. But most often people don’t take this argument into account anymore. They are just interested in, well, the economic aspect but also in cultural identity and things like that. But I think that peace, and having shared interests, is still the major benefit of the EU. And I think it would be really bad if there would be more countries exiting the EU.

And I would not be surprised if in the end, the Brexit will be a very soft one. But of course there all kinds of political pressures and you don’t know if the May administration will survive for long; there are so many uncertainties. So it is extremely hard to tell.

Q. Do you think that your research on Brexit impact gives our students reason to be concerned about their international professional futures?

A. Well, I think so. So, I have a course in the second year of the bachelors in business economics which is about trade policy and economic integration. Topics like Brexit got quite a lot of attention. I also organized a guest lecture which was given by someone who was working for the Minister of Foreign Affairs in The Hague, and he is on the Brexit task force, so he is involved in negotiations with the EU 27. He gave a very insightful lecture about Brexit and the students really liked it…they were very positive and had many questions after, so students are really interested in this.

I also think that it provides a good opportunity to tell students about practical implications of the theories that they learn. Quite often university students feel that their education is too much focused on theory and there is hardly any application. So this is a way in which you can illustrate theories and show that they are really relevant, and also show that governments do not always behave according to theory.

And of course, I think that there is one other major lesson to be drawn from Brexit, which is that economics is not everything. I mean, when we came up with the result initially that those regions that voted for Brexit are also the most dependent on the EU, then there was also someone who drew a similar graph with attitudes towards immigration; and there was a very close fit. So, regions with a negative attitude towards immigrants, they tended to vote “leave”.  And that fit was much stronger than the fit that we found with our economic implications.

Q. Do you think our students here will need to take these impact results into account when they are strategizing for their own futures: where they will go for work, or what kind of work they should be doing?

A. No. Not really. I think they should know about issues like these as citizens of their countries and of Europe. But most of our students go working for companies – many of the companies are oriented towards domestic markets. So professionally I don’t think they can learn much from this. But I think they should just know given that this is in the news almost on a daily basis and they should know something about the world around them. I think from that perspective it’s mandatory to have some knowledge about things like this – also about Trump, for example, because there are many similarities between what is going on in the US and the UK. So they should know about issues like these and inform their own opinions.

Further reading:

• Bart Los, Marcel Timmer and Gaaitzen de Vries (2016), “Tracing Value-Added and Double Counting in Gross Exports: Comment”, American Economic Review, vol. 106, pp. 1958-1966;
• Marcel Timmer, Bart Los, Robert Stehrer and Gaaitzen de Vries (2016), "An Anatomy of the Global Trade Slowdown based on the WIOD 2016 Release", GGDC Research Memorandum 162, University of Groningen.