Economic Causes & Long-Term Effects of Great Britain's "Brexit" from the European Union

Over the course of the next two years, the United Kingdom and the European Union will be participating in Brexit negotiations over the United Kingdom's withdrawal from the European Union. This paper discusses in-depth the expected economic effects of Brexit. To satisfy the desires of those who voted to leave the European Union, the United Kingdom will leave the European Single Market, creating barriers to trade. In exchange, the long-term effects for the United Kingdom and the European Union are expected to be negative. Despite this, it appears that negative effects on British direct foreign investment have been overstated and the European Union may be able to benefit from a well-handled relocation of financial services inside the European Union. The paper also makes a few suggestions regarding Brexit negotiations, advising the United Kingdom to make concessions to European Union in areas such as contributions to the European Union budget for increased goodwill and greater access to European markets.