Aftermath of the Scottish Referendum

A few takeaways from the 55-45% victory for No in the Scottish independence referendum: The polls overestimated support for independence, just as in the 1995 Quebec referendum. Secession from a well-established democracy is extremely difficult due to voters' risk-aversion and status quo bias. Scotland's right to decide elicited salutary promises of decentralization from the British …

On Eve of Scottish Vote, Another Look at Capital Markets

Unless the polls are systematically biased or there is a late-breaking surge in support for "Yes," the "No" campaign looks set to squeak by with a narrow victory in the Scottish independence referendum. On the betting markets, a "Yes" vote has plunged below an implied probability of 20%. What has this decline in the prospects …

More on Economics of Secession

The Oxford Review of Economic Policy has a brand-new special issue on the economics of independence. The entire issue seems to be open-access right now, so check it out. (HT: Doug Irwin) In Scottish news, polls have turned a bit against independence, and betting markets now price a "Yes" at around 22-24%. I will take …

Scottish Independence and the Markets

What can we learn from capital markets about the likely consequences of Scottish independence? A trio of recent polls has shown the "Yes" side to have pulled roughly even with "No." With momentum on their side, it's not unthinkable at all that "Yes" will pull it out, resulting in the first secession from a Western …

Scottish Independence Debate

UK Labour MP and former Chancellor of the Exchequer Alistair Darling and Scottish First Minister and Scottish National Party MSP Alex Salmond last night debated independence for Scotland as part of the campaign leading up to a referendum on September 18. While the "Yes" camp remains slightly behind in the polls, they have been catching …

Persuading the Scots

The Government of Scotland has just released its 600-odd-page white paper on independence in advance of the September 18, 2014 referendum on the question. First Minister Alex Salmond and the rest of the pro-independence side have their work cut out, with the latest poll showing a 47-38% plurality in favor of "No." In part, the …

Scottish Referendum Deal Reached

British Prime Minister David Cameron and Scottish First Minister Alex Salmond have reached a deal on the upcoming Scottish independence referendum. It looks as if the SNP have gotten what they wanted in several respects: 16- and 17-year-olds will be allowed to vote. The referendum will be held in late 2014. While the Electoral Commission …

How to Solve the Scottish Referendum Question Controversy

Scotland's upcoming independence referendum has been in the news in Britain. The Scottish government wants to hold the referendum in 2014, but UK Prime Minister David Cameron has said that Westminster holds ultimate control over the wording and timing of any legally binding referendum and wants to hold the referendum sooner. Another point of contention …