The big day is here. A referendum that should never have happened, forced by a minor extremist party, allowed to happen by intellectual lightweights in government. The EU Referendum decides whether Britain keeps its seat at the table or is pushed outside to listen through the keyhole. So despite my libertarian leanings I’m voting to stay.
This is why. (Note: I have Masters training in finance, statistics, and behavioural economics, so while not a pro, I’m at least an informed amateur). Here we go:
Pretty much everyone believes a Brexit means economic difficulty for a while. Opinions as to how bad it’d be vary, but nobody – Remain or Leave – is pretending it’d be hugs and puppies by Monday. With even Leavers generally agreeing there’ll be a year or two of pain.
Now while we can predict broad economic outcomes a few years out with some accuracy (it’s called the Short-Term Debt Cycle) nobody can predict much beyond that.
So: there is 100% agreement we’ll have a couple of painful years -a timescale we can predict. Versus a 50% belief we’ll grow faster afterwards – a timescale that can’t be predicted.
In other words, Remain’s economic case is grounded in reality, whereas Leave’s is based on wishful thinking.
Someone on the street offers you a choice of £10 today, or a 50% chance of £12 in five years. Which would you take?
If you like Gaussians, then assuming the first guess falls within two SDs and the second within the third, this means there’s over 95% chance the economy is best off with Remain, versus less than a 5% chance it’s best off with Leave.
Based on simple statistics, the economy is better off if we Remain. Because a Remain vote is grounded in solid reality, whereas a Leave vote is wishful thinking. If you’re voting on the economy as I am, Remain is your best choice.