French Says No-Deal Brexit Would Introduce Supply Side Frictions

The video discusses the current trend growth rate of the UK economy, estimated at 1.5%. It explores the potential impact of a no deal Brexit, which could introduce supply side frictions and reduce GDP by 7-9% over 15 years. The role of fiscal policy is examined, suggesting that a looser fiscal policy, similar to the US, could offset some of the negative impacts. However, it would not fully mitigate the effects, leading to a lower trend growth rate due to reduced efficiency.

What is the current trend growth rate of the UK economy?

• 1.5%

• 0.5%

• 3.0%

• 2.5%

What is the estimated cumulative impact on GDP over 15 years due to a no-deal Brexit?

• 10 to 12%

• 1 to 2%

• 7 to 9%

• 3 to 5%

What type of economic frictions does a no-deal Brexit introduce?

• Monetary frictions

• Labor market frictions

• Supply-side frictions

• Demand-side frictions

How might the UK use fiscal policy to counteract the effects of a no-deal Brexit?

• By increasing interest rates

• By implementing stricter regulations

• By adopting a looser fiscal policy

• By reducing public spending

What is the expected outcome on the UK economy's efficiency after a no-deal Brexit?

• It will increase significantly

• It will remain unchanged

• It will increase slightly

• It will decrease