It is worth spending time with the absurdities of tariffs. The US has a 6.5% tariff on garden umbrellas, but no tariff at all on umbrellas with telescopic shafts. Walking sticks, meanwhile, attract a 4% tariff.
Last time I checked there were 20+ classifications of milk under the CET.
Milk is insane. (I have just discovered.)
All milk is categorised by both proportion of milk fat / proteins and starch / glucose, resulting in a positively ridiculous number of product codes. At the low end, some milk gets tariffs of as low as 4%. Others get charged close to 100%. (This is for the EU.)
It's a conditional forecast. For example, I can't predict how much you will weigh 10 years from now, but I know that, all things being equal, you will weigh more if you eat an extra bar of chocolate every day and I can quantify the effect.
Nice analogy. I was trying to think of one.
Is it really? Economic forecasts would be even worse if they only looked at one side of the issue.
I don’t know what you mean by saying one side of the issue.[...].
But we don’t live in a universe where the only thing that will change is our relationship with Europe. So equally useless, I’d suggest.
What extra growth enhancing actions is the UK going to take that we couldn't take as part of the EU? Either you believe in the power of free trade to enhance growth or not.
Then why not trade freely with the whole world?
We largely do already, and I see little evidence that Leaving will reduce trade barriers to our exports, and not convinced that Imports need easier access.
That is patently untrue. The EU has erected a giant trade barrier between it and the rest of the world.
I think that's harsh. Outside automotive and agriculture, the EU has lower tariffs than any other major trading bloc, and it also has more FTAs.
Could we be more free trade than the EU - i.e. more like South Korea - yes, of course we could. But the truth is that the EU is less protectionist than the US, China, India or Japan.
Things I got wrong.
South Korea's average tariff is 7.7%. The EU's is 1.6%.
Edit to add: South Korea is, of course, unique in having FTAs with China, the EU, the US and Japan.
Assuming the average is weighted by what they actually trade in, is that a major factor? If the EU produced what South Korea does, would its "average tariff" be higher?
It's weighted by what they actually import. If you import a lot of raw materials (i.e. oil, aluminium, etc.) then your average tariff is dragged down by the fact that commodities typically aren't subject to tariffs.
This, in particular, drags down the China number, as they import ridiculous quantities of raw materials. Still, despite that, China still charges an average of 3.5%.
What assumptions on immigration and population change are made within these figures?
Note that if the UK's net population grew by 0.34% (220,000) less per annum post Brexit than it would were we to remain in the EU, in 15 years time it would be 5% lower than otherwise. 220,000 less net immigration after an end to migration from the EU is not an unreasonable assumption, given that for all their bluster the EU economy is highly dependent upon its exports to and huge balance of trade surplus with the UK and will negotiate to preserve that if it can.
So assuming that these are changes in gross GDP being quoted, and the study assumed lower UK population growth of this magnitude, then after 15 years the UK's GDP per head of population would be exactly the same in a free trade Brexit scenario as in a Remain scenario (if for a moment you suspend wider scepticism about the basis of these calculations).
If you change the number of people - you change the gdp figure too.
Also the evidence suggests increased immigration means increased productivity actually gdp per head likely to be lower...
You miss the point. Which is, did the disputed study assume that the UK population post Brexit would be lower, and built it into its forecasts, thereby naturally arriving at a lower GDP but not GDP per capita? It is the latter and not the former which is the measure of our average collective economic wealth as individuals. If not we would consider the people of China to be the wealthiest in the world.
On your second point. In fact all the evidence suggests that increased unrestricted immigration from within the EU coincided with the point at which UK economic productivity stagnated. Not surprising - cheap labour came to make more economic sense than productive capital investment, which is why you don't see automatic car washes anymore. Most developed countries in the world restrict their migrants to prioritise mainly those with useful skills, but not the UK with regard to the EU.
What assumptions on immigration and population change are made within these figures?
Note that if the UK's net population grew by 0.34% (220,000) less per annum post Brexit than it would were we to remain in the EU, in 15 years time it would be 5% lower than otherwise. 220,000 less net immigration after an end to migration from the EU is not an unreasonable assumption, given that for all their bluster the EU economy is highly dependent upon its exports to and huge balance of trade surplus with the UK and will negotiate to preserve that if it can.
So assuming that these are changes in gross GDP being quoted, and the study assumed lower UK population growth of this magnitude, then after 15 years the UK's GDP per head of population would be exactly the same in a free trade Brexit scenario as in a Remain scenario (if for a moment you suspend wider scepticism about the basis of these calculations).
If you change the number of people - you change the gdp figure too.
Also the evidence suggests increased immigration means increased productivity actually gdp per head likely to be lower...
You miss the point. Which is, did the disputed study assume that the UK population post Brexit would be lower, and built it into its forecasts, thereby naturally arriving at a lower GDP but not GDP per capita? It is the latter and not the former which is the measure of our average collective economic wealth as individuals. If not we would consider the people of China to be the wealthiest in the world.
On your second point. In fact all the evidence suggests that increased unrestricted immigration from within the EU coincided with the point at which UK economic productivity stagnated. Not surprising - cheap labour came to make more economic sense than productive capital investment, which is why you don't see automatic car washes anymore. Most developed countries in the world restrict their migrants to prioritise mainly those with useful skills, but not the UK with regard to the EU.
Of course, most hand car washes seem to be using illegal Albanian labour these days...
Could Leavers tell me whether the regional economic impact assessments are:
1. WRONG in their claimed direction of impact? 2. WRONG in their claimed level of precision? 3. WRONG in their orderings of relative impacts between regions? or 4. WRONG WRONG WRONG?
Leavers seem to be wobbling between all four answers (and, indeed, wobbling generally).
It's too early to say.
Leavers don’t want to admit their policy has real economic costs. It’s not stupidity - just a grotesque lack of moral responsibility.
So far, I think the economic consequences of the Leave vote have been benign. The balance of payments has improved due to rising exports and production, and a slowdown in consumption. Employment growth has remained strong, and productivity may now be picking up. I don't see how we could indefinitely act as the EU's consumer of last resort.
That does not mean that I know for certain that the economic consequences will continue to be benign for the next 15 years. That will depend on the economic policies of successive governments.
So far Brexit has cost iu about 2 percentage points of GDP growth. Roughly in line with the Treasury "shock" forecast, funnily enough. Although that forecast did get employment rates badly wrong.
The economy has grown by 2.8% since June 2016. I am not convinced it would have grown by 4.8%, were it not for the Brexit vote. No one was predicting that sort of growth rate in early 2016.
Cost of Brexit is relative to base case, per the report. You can't assign world growth or lack of it to Brexit. The growth is in the eurozone, ironically and that's pulling us up, for now.
I actually have quite a bit of understanding for the Leavers who are saying, in the face of these projected figures, that they had bigger considerations than just trade and economics in deciding their vote. I have to say that such things were not high on my list of considerations either. I voted Remain mostly on sovereignty, social and idealistic grounds - so I can't really fault Leave voters for doing the same and nor will I try to.
@HYUFD - You keep telling us the outcome will be an FTA that ends free movement. Are you confident about going out campaigning based on these figures?
As Robert Kennedy once said GDP measures everything except that which makes life worthwhile. 'It measures neither our wit nor our courage, neither our wisdom nor our devotion to country or family'.
It's macro and most people don't see how it benefits them directly as its benefits are not evenly spread. Iran has a higher GDP than Norway - but it's not as happy or as wealthy.
Maybe that's the problem - still fighting using the same arguments that failed in June 2016. Or to put it another way there is more to life than money. What use is earning double when prices have risen ten fold?
Comments
All milk is categorised by both proportion of milk fat / proteins and starch / glucose, resulting in a positively ridiculous number of product codes. At the low end, some milk gets tariffs of as low as 4%. Others get charged close to 100%. (This is for the EU.)
This, in particular, drags down the China number, as they import ridiculous quantities of raw materials. Still, despite that, China still charges an average of 3.5%.
It’s good of the London based Remainers to offer to take a hit to support the rest of the country
On your second point. In fact all the evidence suggests that increased unrestricted immigration from within the EU coincided with the point at which UK economic productivity stagnated. Not surprising - cheap labour came to make more economic sense than productive capital investment, which is why you don't see automatic car washes anymore. Most developed countries in the world restrict their migrants to prioritise mainly those with useful skills, but not the UK with regard to the EU.
New Thread!