Holy Cross Professors Discuss Economic Uncertainty in the Wake of Brexit

The U.K.’s decision to leave the European Union has far-reaching implications, and media have turned to Holy Cross professors to help make sense of what the Brexit means locally and abroad.

Katherine Kiel, professor of economics and chair of the economics and accounting department, recently spoke with a State House News reporter about how the uncertainty in Europe is impacting the Massachusetts economy. The article ran in the Boston Business Journal, Milford Daily News, the Enterprise & Sentinel , and the Telegram & Gazette.

The Boston Business Journal reported that the Associated Industries of Massachusetts’ monthly business confidence index, which is based on a survey of AIM member-companies across the commonwealth that asks questions about business conditions, dropped 1.6 points in June.

These results, Kiel said, were sparked by Brexit. “We did have a drop over the last month, and part of the issue, I think, was that the surveys were coming back in right around the Brexit vote,” she said. “Some people answered the survey when they were quite confident it wasn’t going to happen and some came in after the vote to leave. So it complicates interpretation of the data this go around.”

Olena Mykhaylova, assistant professor of economics, wrote a piece for Fortune focusing on the economic uncertainty England would have faced if the Bank of England cut interest rates in the wake of Brexit.

Mark Carney, governor of the Bank of England, “hopes that lower interest rates will bolster flagging consumer and business confidence and book economic output via higher spending and investment, but the impact is likely to be negligible,” she wrote.

Mykhaylova continues “the effect of monetary policy on the economy is likely to be reduced in times of uncertainty,” she wrote. “So cutting interest rates this week may not deliver the desired uptick in spending.”

Read the entire article in Fortune.

This “Holy Cross in the News” item is by Jessica Kennedy.