The Bank of England’s prediction that civilisation will end with Brexit is merely an effort to outdo in shrillness similar analyses by the Treasury and the IMF.
All official agencies, trapped in an echo chamber, are competing to paint the grimmest picture of economic consequences of a British exit from the European Union. They are straining so hard because their projected costs of exit have no basis in economic theory or empirical findings.
“I don’t understand how you can get that kind of cost without making some big ad hoc assumptions,” tweeted Nobel laureate Paul Krugman.
When he uses the expression “big ad hoc assumptions”, he is saying the Bank is making up the numbers.
Mervyn King, who headed the Bank between 2003 and 2013, says he sadly “concurs” with Krugman’s assessment.
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