This repository contains empirical data and analysis on the economic output (GVA and GDP) for all regions of the United Kingdom. The purpose of which is to calculate the Lucas Wedge regarding the lack of a Northern Irish Executive since January 2017.
All data used in this study can be found in the data directory of this repository. Specifically, we pull from three main data sources:
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Long-term regional quarterly Gross Value Added figures across the UK from 2010--2016 (ONS).
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UK-wide Gross Domestic Product figures from 1960--2018 (ONS).
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Projected GVA growth for Northern Ireland from 2019--2021 (Danske Bank & Oxford Economics).
Using an Autoregressive model (ARIMA) with fixed effects to capture and compensate for Brexit-related impacts, we find the following Deadweight less schedule.
| Year | GVA (£m) | Deadweight loss (£m) | Percentage of GVA (%) |
|---|---|---|---|
| 2017 | 38,175 | 131.06 | 0.34 |
| 2018 | 38,905 | 412.82 | 1.06 |
| 2019 | 39,648 | 657.96 | 1.66 |
| 2020 | 40,048 | 1,236.54 | 3.09 |
| 2021 | 40,571 | 1,688.25 | 4.16 |
By the end of 2019, the estimated cumulative deadweight loss from the lack of NI Executive will be approximately £1.2 billion. As uncertainty mounts and investment levels fall, by 2022 the cumulative deadweight loss could reach £4 billion.
The Lucas Wedge can be shown graphically below:
Please contact me with regards any issues or queries that you have.