Estimating the Potential Impact of Brexit on Commonwealth Tourism, Remittances and Aid

This paper analyses the responsiveness of Commonwealth tourism, remittances and aid to changes in UK macroeconomic indicators, in particular, to UK GDP and the UK exchange rate, using a panel data gravity model approach. It finds a negligible impact from Brexit on these Commonwealth sectors and suggests that all sectors are more responsive to changes in UK income than to changes in the UK exchange rate and that remittances are the most resilient sector of the three. The paper finds that positive externalities from improving the Commonwealth trading relationship could increase financial flows across the respective sectors.