http://www.independent.co.uk/news/business/brexit-paul-krugman-zero-chance-...
''The invisible benefits of being part of the EU, the lack of friction [in exports and imports], seems to have had a significant impact on trade patterns,” he said. “You’re reversing that, so that’s a cost. That’s much more tangible than any pipe dreams about big gains elsewhere.” Mr Krugman, who is currently Professor of Economics at the City University of New York and is regularly featured at the top of lists of the most influential contemporary economists, said the costs of Brexit could be in the order of 2 per cent of GDP. “It’s not a huge cost ... but it is a cost,” he said. A study by economists at the London School of Economics has estimated the damage could be as great as 9.5 per cent of GDP if the UK leaves the EU without a free trade deal. EFT – formerly known as Economists for Brexit – have claimed that if the UK adopted a policy of “unilateral free trade”, essentially dropping all imports tariffs, the economy would grow more rapidly and living standards would rise. But such a policy would create major economic turmoil as sectors, such as farming and manufacturing, would suddenly face a flood of cheap imports from abroad. Moreover, major flaws in the calculations of the EFT group have been exposed. The Government has said the UK will ultimately leave the single market and customs union and that it wants to conclude a comprehensive free trade deal with the rest of the EU after Brexit. The value of sterling has been rising in recent weeks, but the pound remains well down on its level against the US dollar on the night of the Brexit referendum, when it experienced a record one-day drop as currency traders bet Brexit would inflict long-term harm on the economy. “A weaker pound is pretty much what you would expect – and appropriate,” said Mr Krugman. “If you’re going to do this thing then you do want a weaker pound.”
