Quantifying Brexit: from ex post to ex ante using structural gravity

Abstract Exploiting changes in the geography of economic integration Europe, this paper quantifies effects Brexit from ex post to ante using structural gravity. By isolating directional treatment EU agreements for UK, analysis reveals important heterogeneity across agreements, sectors, and within pairs. We find that these matter size distribution welfare Brexit—the withdrawal UK resulting into a return trade costs situation quo ante. make point with help modern multi-sector model is able capture inter- intranational production networks. In line other papers, are higher than most countries. However, tends attenuate overall while giving rise substantial between EU27 members sectors. A scenario could shift bargaining power eliminates asymmetries as soon fully liberalizes its market.