Share / Print
Opinion

What the World Will Learn From Brexit’s Market Mess

By Pankaj Ghemawat

Pankaj Ghemawat

The real consequences are still hotly debated, and will continue to be in the short run. But over the next few months and years, much will be learned about the consequences of such breakups.

The votes are in, and Britons on Thursday voted to leave the European Union. While the immediate results—in terms of exchange rates and stock market indexes—are overwhelmingly negative, those are based on expectations that turned upside down within a few hours. The real consequences are still hotly debated, and will continue to be in the short run. But over the next few months and years, much will be learned about the consequences of such breakups. So one silver lining is that Brexit is an experiment, albeit an oversized one, from which other polities might be able to learn.

The learning opportunities arise, in part, because no state has ever withdrawn from the EU. Greenland, part of Denmark, did vote to leave the EU’s predecessor, the European Economic Community (EEC), in 1985. But as former World Trade Organization Director General Pascal Lamy recently reminded me, 50-60,000 people, whose major export is fish, and who continue to be associated with the EU by virtue of their relationship with Denmark, can’t be counted on as a decisive experiment.

Read the full article as published in Fortune.

___
Pankaj Ghemawat is a Global Professor of Management and Strategy and Director of the Center for the Globalization of Education and Management.