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Did Austerity Cause Brexit?

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Did Austerity Cause Brexit?

CESifo Group Munich,

5 min read
5 take-aways
Audio & text

What's inside?

Austerity was a material factor in the United Kingdom’s vote to leave the European Union. 

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Editorial Rating

9

Qualities

  • Controversial
  • Analytical
  • Hot Topic

Recommendation

Policy decisions have consequences. This is the essential lesson of Brexit, economist Thiemo Fetzer concludes in this original and broad-based research. He finds that populism in the United Kingdom, fomented by austerity cuts to social programs, boiled over into dissent significant enough to inflict long-lasting political and economic disruption. getAbstract recommends this noteworthy report on the reverberating effects of fiscal decisions to policy experts, regulators and business leaders, all of whom must now reckon with the long-term impacts of Brexit.

Summary

Many people have benefited from the technology and trade that have linked economies across the globe. But not everyone has shared in the bounty. In the United Kingdom, government programs provided assistance to those who, with less education and limited skill sets, had suffered the ill effects of a globalizing economy. But those expenditures came at a cost to fiscal stability. From 2010, the UK began to make steep cutbacks in social safety nets and to impose pay freezes on government employees, creating a opportune moment for the UK Independence Party (UKIP), ...

About the Author

Thiemo Fetzer is an assistant professor of economics at the University of Warwick.

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