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.

In what way can fiscal policy help mitigate the impact of a supply side shock?

What is the expected trend growth rate after accounting for additional frictions in the UK economy?