Vol.:(0123456789) Quality & Quantity https://doi.org/10.1007/s11135-019-00895-5 1 3 The economic Gordian Knot of Brexit: an East and Southeast Asian perspective Ruiz Estrada Mario Arturo 1  · Evangelos Koutronas 2  · Donghyun Park 3 © Springer Nature B.V. 2019 Abstract The objective of this paper is to establish conceptual foundations of analyzing the eco- nomic dimensions of Brexit. The International Financial-Trade Exchange Leaking Index (TIFTEL-Index) attempts to analyze and compare pre-Brexit versus post-Brexit interna- tional trade and international fnancial transactions between East and Southeast Asia and Europe. TIFTEL-index is based on three main variables, namely (1) international trade exchange marginal rate (∆Τ′), (2) international fnancial exchange marginal rate (∆σ′), and (3) GDP in real prices growth marginal rate (∆γ). Simulation fndings indicate that Brexit will have only a limited negative efect on the world economy. In addition, Brexit will afect East Asia more than Southeast Asia region. Keywords Asia · Brexit · Europe · Economic modeling · Policy modeling JEL Classifaction F1 · F3 · G1 1 Introduction On June 23 2016, Britain crossed the Rubicon with the vote on country’s membership in the European Union. The British electorate decided in a deeply divided referendum the impending withdrawal of the United Kingdom (UK) from the European Union (EU), with 52% voting Leave and 48% voting Remain. A much larger majority of parliamentary seats * Ruiz Estrada Mario Arturo marioruiz@um.edu.my https://www.econonographication.com Evangelos Koutronas evangel_gr@usm.my Donghyun Park dpark@adb.org 1 Social Security Research Centre (SSRC), Centre of Poverty and Development Studies (CPDS), Faculty of Economics and Administration, University of Malaya, 50603 Kuala Lumpur, Malaysia 2 School of Management, Universiti Sains Malaysia, 11800 George Town, Penang, Malaysia 3 Asian Development Bank (ADB), 6 ADB Avenue, 1550 Mandaluyong City, Metro Manila, Philippines