European Central Bank Says Austerity Is Three Times as Bad as Brexit

July 01, 2016

CEPR

A new study from the European Central Bank (not official bank policy) estimated the size of the output gap in the euro area at 6.0 percent of GDP. Most analyses put the cost to the UK’s from its exit from the European Union at around 2.0 percent of GDP. If the ECB’s estimate of the output gap is correct, then austerity is imposing three times as much harm on the euro zone countries as Brexit is projected to impose on the UK.