[teestub]

You keep redirecting to economic forecasters, like it's only a subset of economists who are warning about the negative effects of leaving the EU, when it is in fact the majority of businesses, BoE etc. etc.

Plenty of forecasters are currently talking about another financial crisis looming, with unsecured debt at levels way above 2008.

[Oldmanmatt]

 Oh come on guys, you know Pete is right.
Nobody involved in Economics, Finance or international Business, has the slightest clue.

Because they haven’t always been right.
 And citing an overwhelming body of evidence and forecasts that don’t square with Brexiteer positions is ironic.
Because it hasn’t happened yet and no one can know until is has.

But, nothing very bad is going to happen, because the forcasts were wrong, because it has already happened in 2016 and the world didn’t end.

Pick your argument.

In the end, we’ll find out. What we are doing now is placing bets and weighing odds.
Balance of evidence suggests the “good stuff” is a longshot.

[danm]

You don't get to post and then say "no, no" I don't want to engage. Either be quiet or say what you mean and expect to be challenged (or perhaps agreed with, you never know). Sorry Pete, but you've come across as an arsehole on this.

?? Bit uncalled for. I thought I made it clear I only posted in reply to Matt's asking 'any flaws', to make a witty retort (aka unfunny joke). Not any engagement in any so-called 'debate'.

Some people need to chill out. No need to be a dick just because the world seems to be falling apart. It's always been so.

On reflection, that was a bit over the top, so apologies from me. I've also wadded you to keep the karmic balance. Still think you're wrong on Brexit but I guess we'll all find out in due course!

[petejh]

 

[seankenny]

So Pete, this Cambridge paper that gives results you like. If GDP is down but GDP per capita not so much, surely this means the population has decreased. I’m guessing that this means lots of EU citizens leaving.

Now, ignoring the dramatic upheavals in many lives that this represents, and which you good, good Brexiters always appear so sanguine about, does the model include the effects of losing lots of skilled workers? Or does it just focus on trade?

[petejh]

Haha, nice re-framing there Sean.

I can play that game:
'The paper that gives results you don't like'

How about trying to view the paper through objective eyes... From what I can tell - as a clueless layman - they've put forward a solid evidence based case and gone into the failings of their own profession and explained how it can be done more accurately. Is there an agenda there beyond truth-seeking? A conflict of interest? Read their paper and tell me why you think they're wrong.
 
And how about viewing the accuracy of *all* economic forecasts/forecasters with the same level of scrutiny and scepticism an academically minded person should employ when looking through any evidence..
Because if we were discussing a less passionate topic on UKB - like nutrition advice, or Latticeboard training advice - and the evidence presented to support a belief in 'xyz' was of the quality of the record of economic forecasting, then someone would quite rightly point out how weak that evidence was.
Yet people in this debate readily justify their worldview by accepting forecasts by pseudo-scientists who going by any accepted norms of testing their theory and comparing with the reality, should be discredited or treated with extreme scepticism at least.

[tregiffian]

The venerable economist Patrick Minford is worth a google in this context.

[Teaboy]

The venerable economist Patrick Minford is worth a google in this context.

Christ on a bike, his favoured model might lead to cheaper goods but it's an acknowledged (by him) part of the model that it will lead to decimation of much of UK manufacturing and agriculture although I guess in time we can turn build plenty of battery farming sheds on our green and pleasant land.

[seankenny]

Pete, but tight for time here as I’m supposed to be going to a wine tasting in Tuscany, but I’ve skim read the paper, much of what seems to be a debunking of the Treasury models and an argument that UK accession to the EU made no difference to trade. It seems to ignore services (unless I misunderstood the data sets they are using - it’s difficult to check those on a phone sat by a pool), and this analysis also depends upon data for U.K. trade with all the EU 28 since 1950.

They don’t show their model in detail but they do outline their assumptions. A few jumped out immediately:

They assume net EU migration to fall to zero by 2019. This is unlikely, in part because it would knacker the NHS, but essentially you now know your argument that “Brexit won’t be so bad” requires the NHS to be denuded of staff.

They assume all UK exports to the EU lost as a result of Brexit will be replaced in 20 years. As I understand it (I might be wrong) many of our exports are products which are created as part of pan-EU supply chains. We aren’t going to have just in time manufacturing with the US.

They “arbitrarily” assume a 10% loss in EU exports, a sixth of the Treasury’s assumption. Are the results benign because the assumptions are benign? You be the judge.

Just read a section on the model, it doesn’t include a lot of standard macro model elements (profit maximising behaviour by firms, expectations) but consists of a series of econometric relationships based on past UK data. They then go on to say Brexit is totally new so we can’t use the past data on trade which the Treasury’s gravity model relies upon. So they’re using past data to build a model that is needed because past data isn’t useful in this context.

There may be good answers to these points, of course.

Anyhow since you seem quite exercised by economics and forecasting, do you have a view on conditional vs non-conditional modelling?

[seankenny]

And to answer my own question, no, they don’t cover the effect on productivity caused by having a much more closed labour market.

I look forward to an argument that the bureaucrats who deport British citizens will be able to accurately select productivity enhancing employees.

[teapot]

Here is an updated version of this paper from this year

https://www.cbr.cam.ac.uk/fileadmin/user_upload/centre-for-business-research/downloads/working-papers/wp493.pdf

Just started reading it, and thought it was worth making sure people read the most recent draft (2018), rather than 2016 version.

Interestingly the introduction to this more recent draft explains that despite their findings the authors were mostly remain supporters and would still be remain supporters if there was another vote.

I appreciate the work of these economists to question the pessimistic post-Brexit forecasts, and will now get back to it.

Cheers Pete for posting the report up.

[petejh]

I'm a bit rushed myself Sean as I've shortly to pop out to keep on oiling the wheels of industry here in the northern powerhouse... but an initial review of your post seems to show you're trying to pick up flaws in the author's logic and debunk their model, while highlighting my lack of professional economic modelling credentials.

Your specific concerns about the assumptions behind the paper's model are better directed to the authors of the paper:
Graham Gudgin: gg14@cam.ac.uk
Ken Coutts: kjc1@cam.ac.uk
Neil Gibson - EY Ireland

The credentials of the authors of that paper seem to be rock-solid. Do you know otherwise? Let us all know on here what answers you get to your questions about their model.

While you're questioning the assumptions underlying this paper's model, will you be objective and apply equal scrutiny to the assumptions underlying the Treasury model? As this paper does.


To your question about my view on conditional v non-conditional modelling - I wouldn't know the difference if one or the other approached me and offered to pose. But your querying of my knowledge of modelling has nothing at all to do with the point I'm making, and everything to do with you trying to play the man not the ball - a sign of a weak argument.

My point is:
There's no doubt that the profession of economic modelling/forecasting has been shown up to be seriously lacking in credibility, not just about brexit but for a long time. You don't need to have a working knowledge of the nuts and bolts of economic modelling to see how completely flawed forecasts have proven to be. Therefore it doesn't take a Keynes to question the underlying basis for people's fears post-brexit, if they're basing those fears on said economic forecasts.

In the author's words:
The short-term forecasts of the Treasury and OECD, which have turned out to be wrong, have further damaged the already weak public confidence in economists’ contributions to public debate. Our paper is not necessarily an argument in favour of Brexit. But it will cast doubt on traditional economic modelling and it does question the ability of the economics profession to provide high quality policy analysis on issues of national importance.

As I've said all the way through, the economic argument isn't my primary concern. But I've seen nothing about the economic side of things since June 2016 that's made me doubt my views.

Enjoy your Tuscan wine-tasting. I'll be supping Guiness in Wicklow.

[seankenny]

Read their paper and tell me why you think they're wrong.

...
 
And how about viewing the accuracy of *all* economic forecasts/forecasters with the same level of scrutiny and scepticism an academically minded person should employ when looking through any evidence..

Erm, I was only doing what you asked. I’ve told you objectively why I think they are wrong. It’s not my fault if the study you are trumpeting as proving your view correct assumes that net migration is zero and hence the NHS is buggered if it wants to employ more nurses. That’s just part of the short run disruption no?

As for viewing economic forecasts with scrutiny, a key part of that is the difference between unconditional forecasts (tea leaves) and conditional forecasts (much more useful). There’s lots about this online and you can easily research it. Since you have a clear opinion on economic forecasts I’d assume you also have an opinion on this.

But, as the paper you quote argues, poor assumptions lead to poor understanding of reality.

[petejh]

Nothing you've just said addressed my point. What I know or don't know about conditional/unconditional models is totally irrelevant to the point I made.

You're mistaking me highlighting an alternative view, for me saying I believe that view *must* be correct. I'm not. I've never argued for economic sunlit uplands. I actually accept brexit probably means an economic hit, at least in the short-term.
 
I'm pointing out that a lot of the negative views expressed on here and elsewhere by people worried about the future have their source in pessimistic economic stories stemming from a few influential well-publicised forecasts. Correct?

Those forecasts have been scrutinised and their assumptions questioned. In what appears to me - an unqualified dumb-ass in economic modelling as you're helpfully implying -  to be an objective and even-handed way by qualified people who's credentials, unlike mine, are rock solid. And who don't have a political agenda just an agenda to be as objective as they can be. This is worth pointing out.

Our conclusion is that most estimates of the impact of Brexit in the UK, both short-term and long-term, have exaggerated the degree of potential damage to the UK economy. We stress at this point that this is not a politically-driven exercise. Most of the four-person team behind the research for this and our other papers voted ‘Remain’ in the 2016 referendum and would do so again if given the chance. Our purpose is rather to establish a sound basis for the ongoing debate on the likely potential economic impact of Brexit, and more generally to question the quality of economic analysis in dealing with major, macroeconomic policy issue like Brexit.

No doubt it doesn't sit easily with you or lots of others that it's me pointing it out, because 'well I would wouldn't I'. But nobody else I've seen on here or among 'remainers' is pointing it out. Probably because it doesn't sit comfortably with their worldview, or because they haven't put that much effort into questioning their view and researching alternatives.

[highrepute]

As far as I can see. Pete, that cambridge paper and numerous government, economists and business reports all agree that Brexit will be bad for the UK economy - it seems almost everyone, leave or remain is agreed on this - they just disagree to what extent.

This a far cry from the promises plastered on buses prior to the referendum. This is what pisses me off. Where's the good news?

[abarro81]

Never fear James, you'll be free of the tyranny of Brussels and can revel in your newfound sovereignty.. which will be great... for some reason.

[Oldmanmatt]

 

Dyson to build his new electric car in Singapore http://www.bbc.co.uk/news/business-45950377

[Will Hunt]

Dyson to build his new electric car in Singapore http://www.bbc.co.uk/news/business-45950377

Working link.

[Oldmanmatt]

Dyson to build his new electric car in Singapore http://www.bbc.co.uk/news/business-45950377

Working link.

Cheers.
Dunno what was wrong the first time.

I’m sure Dyson’s views and decisions are not at all based on disadvantaging his competition.

This is the first day I’ve sat down to read the papers in weeks and this Telegraph article reminded me of a snippet I caught on one or other TV channel (presented as “balance” to the People’s vote march). The clip was the Farage twat, drinking in a bar, with some fellas of my age; who were gleefully telling the reporter that “it’s abiut time we got back to being the British Empire” and that “there are 2 billion people in the Empire, we don’t need Europe”.

https://www.telegraph.co.uk/news/2018/10/22/former-summer-capital-india-renamed-end-mental-slavery-british/?utm_medium=Social&utm_source=Facebook#Echobox=1540211748