Two short essays on Brexit
Please answer the following two questions that aim at assessing your ability to relate real life, business relevant, issues to the course theoretical concepts and the discussions we had in class.
If you want to use any other source (which is not required), make sure to carefully refer them.
Part 1 (Max 1000 words in total, this part counts for 2/3 of the grade)
How is Brexit likely to affect the UK business cycle?
Suggested approach (feel free to deviate)
1) Focus on the main drivers of cyclical fluctuations. How is Brexit likely to affect them and why?
2) How would these affect the relevant macroeconomic indicators? Are there feedback effects?
3) Discuss possible policy responses and how they could affect the cycle.
Part 2 (Max 500 words in total, this part counts for 1/3 of the grade)
(Please choose between Question 2a and Question 2b.)
Question 2a
Pick a sector in the UK economy and discuss the main opportunities and threats that macroeconomic changes to the business environment (due to Brexit) could create.
(Please assume that Brexit will indeed be implemented and focus on the medium run, say 1 to 5 years).
Question 2b
How does Brexit change the prospects for the UK public debt?
Suggested approach (feel free to deviate)
1) What are the likely medium run effects of the points you have discussed in question 1? Would they depend on the policy response?
2) What would be the long term consequence of a severe crackdown on immigration? (Hint: think of our class discussion on population growth.)
