The economic cost of a referendum. The case of Brexit

This paper estimates how GDP would have behaved in the United Kingdom after the Brexit referendum in the absence of the mentioned poll. We contribute to the research on the effects of Brexit by quantifying the macroeconomic cost of this referendum before the actual Brexit had taken place. We use the econometric tool of synthetic counterfactuals to analyse this historical event. This paper finds a large and significant cost of Brexit referendum on the GDP of the UK. The loss is increasing in time, representing $156.03 billion from 2016.Q3 to 2017.Q4.