Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/303437 
Year of Publication: 
2020
Series/Report no.: 
LEQS Paper No. 154
Publisher: 
London School of Economics and Political Science (LSE), European Institute, London
Abstract: 
The year 2019 marks the 20th anniversary of the euro as well as Brexit, the expected exit of the United Kingdom from the European Union. This paper examines the relationship between Brexit and the stability of the euro area. We look at stability from the perspective of the distance between core and periphery groups of countries which, we show, is mainly determined by the level of synchronization of economic activity among them. We provide new evidence that the UK economy, since 1990, has become significantly more integrated with the EU economy. The UK moved from being in the periphery before 1990 to being in the core afterwards. We also provide evidence that the level of business cycles synchronization of the UK economy with the EU has had the highest, among all countries, variability over time. We conclude with some policy implications from Brexit for the stability of the euro area.
Subjects: 
European Monetary Union
Eurozone
Core-periphery
Document Type: 
Working Paper

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