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The consequences after Brexit

The consequences after Brexit might be the following three options remain in the Single Market by joining Norway All sign free trade agreement with EU or trade under most favoured nation under WTO here after hard Brexit The purpose of this essay is to go in depth with the third option considered by the majority of macroeconomic studies the worst scenario in terms of trading opportunities GDP and income losses per head The application of the WTO rules implies the introduction of tariffs by the Single Market for goods and non tariff barriers for services mainly this could affect more the UK s services exporters which make up almost half of the UK total exports The UK government tried to quantify in its report the costs of this scenario especially in the long term horizon table n 1 Table 1 Annual impact of leaving the EU on the UK after 15 years difference from being in the EU Further analysis tried to quantity the impact of the hard Brexit under the WTO rules figuring out the range of GDP loss which may vary from 2 2 to 9 Having said that we can easily state that the hard Brexit will lead the UK to a decrease of the GPD in both short and long terms Taking advantage of what we have learned during the course we can demonstrate this loss in income and GPD through different models and concepts Model AS AD Aggregate Supply Aggregate Demand Chart 1 and Chart 2 First and foremost let's assume that UK economy starting point is A chart 1 



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