HM Treasury BLASTED for 'cavalier' Brexit approach in new analysis

Posted on Mar 5 2018 - 12:38pm by admin

The criticism comes in the paper How The Economics Professions Got It Wrong On Brexit, published today by the Centre for Business Research at the university’s Judge Business School.

Co-author Graham Gudgin, an honorary research associate at the centre, said: “Our analysis does not support the frequently repeated claim that membership of the European Union has been good for economic growth in the UK.

“The short-term forecasts of the Treasury and OECD [Organisation for Economic Co-operation and Development], 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.”

The paper, co-authored by Ken Coutts, also an honorary research associate and life fellow in economics at Selwyn College, Cambridge, and Jordan Buchanan, research assistant at Ulster University’s Economic Policy Centre, claims over-pessimism can reflect a bias in favour of EU membership.

It said: “The Treasury has been particularly cavalier in its approach, both in its application of gravity analysis and in applying a ‘knock-on’ impact from trade to productivity.

“Our conclusion is that in order to restore public confidence in economic forecasting for major policy issues like Brexit, economists need to use more relevant analyses, based on a wider range of evidence.”

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