Garry Nelson's teacher
Well-known member
I think it's good that someone from the leavers' side does take the trouble of posting something a bit more substantial than the usual rather simplistic stuff. So I took the trouble of reading it. The authors do score some valid points in their critique the predictive validity of previous 'Whitehall' projections and forecasts. But I don't think their alternative is convincing. If you look at the list of references it is very, very narrow and often simply draws on their own previous work - they embrace 'the Cardiff model' with an enthusiasm which is a little bit predictable given that (I believe) it's Minford's own one.
They are far too optimistic about growth outside of the EU with a no-deal and this seems to be based on a hap-hazard set of trends (non-EU countries are doing pretty well; they sell lots to the EU; the EU's share of world trade is shrinking) which don't really cohere into a compelling case. They also supply us with the following which is quite frightening, implying that a lose-lose is somehow going to be dynamic which drives towards long term solution. In the words of Clint Eastwood: "are you feeling lucky, punk?". This is recklessness masquerading as serious political economy.
In terms of general annoyance to consumers, producers and governments on both sides plainly ‘no deal’ could generate a lot. However, this very annoyance and associated illegalities would force a quick series of practical solutions. Short term disruption is so infinitely annoying to ordinary citizens that governments on both sides would feel extreme pressure to sort it out by all means available: such means are readily available under international agreements and do not require a trade deal. Hence under a no deal breakdown short term disruption is a negative for both sides but each side would know it could be quickly removed. It acts as a general moderate incentive to both sides to find a deal but does not affect relative bargaining power.
