GU Professor on Brexit: 'Look for travel deals, cheap Dyson vacu - Spokane, North Idaho News & Weather KHQ.com

GU Professor on Brexit: 'Look for travel deals, cheap Dyson vacuums, and drink some English cider'

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Britain has entered uncharted waters after the country voted to leave the European Union. Britain has entered uncharted waters after the country voted to leave the European Union.
SPOKANE, Wash. -

So Britain decided to leave the European Union. After all of the witty tweets and jokes made on Facebook, most people are wondering what that means on a global economic scale. A lot of people woke up to doom and gloom scenarios about their 401Ks, so we reached out to Gonzaga University's Economics Department and asked them what all of this means for us. 

We received a reply from Ryan Herzog, Associate Professor of Economics, who gave us some quick bullet point thoughts on what he thinks Brexit will mean for us here in the United States: 

1) I think we are seeing financial markets overreact to the news. The Brexit is something unusual and new which creates uncertainty. I don’t think we know how this will change trade, immigration policies in the UK until after they negotiate their withdraw.

2) The UK is a relatively small trading partner with the US, in all, only 3% of US exports go to the UK. So they don’t buy a lot of stuff from us.

3) With one exception, the UK is the second largest export market for planes. This will have a big impact on Boeing. Boeing’s stock is down more than most of the market.

4) It will take approximately 2 years for the UK and EU to negotiate a withdraw. The depreciation of the pound will likely remain for some time.

5) It’s a good time to visit the UK, just don’t expect your friends from the UK to visit the US.

6) Is a re-vote possible? If so, don’t be surprised if we see a different outcome. 

7) Bigger questions surround the rest of the EU, how does this play out for Greece, Italy, Spain, and Germany? Will we see them leave the EU? I don’t think it changes their status in the EU, after seeing the reaction to the Brexit, I doubt any other country will consider leaving the EU. 

8) The Federal Reserve will likely keep interest rates low for an extended period. Any rate increase will only cause the dollar to appreciate more, increasing the price of US exports on global markets. 

In short, the response in the US stock market is out of fear and uncertainty. I don’t expect it will be permanent. Global markets should settle down in the next week or so. The pound has lost 8% of it’s value to the U.S. dollar which will hurt U.S. exports, mainly trade in airplanes. The drop in the pound will help stabilize the U.K. economy by making exports cheaper.

Look for travel deals, cheap Dyson vacuums, and drink some English cider.  

So there you have it. Your Brexit breakdown. 

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