Towards Indyref2

Two Charts that show indyref2 isn’t causing Scotland’s poor economic performance

by R J Hainey · Published April 10, 2017 · Updated April 10, 2017

Recently there has been a concerted effort to blame the threat of independence on Scotland’s currently poor economic performance.

However, the following two charts cast doubt on this.

The first shows the annual GDP growth rate of Scotland over several years. Those who are blaming the current low GDP growth on indyref2 should explain why GDP growth was rising during the period of the last referendum. The fall only started happening shortly after we voted No. Not that I would blame a No vote, as that would be stupid due to the many variables that come into play. However, people who blame indyref2 for the recent decline don’t seem to mind making wild assertions without evidence.

GDP growing during 2014.

The second chart which suggest the Scottish independence referendum was insignificant in terms of its economic damage was published by the Fraser Of Allander institute.

In a report looking at how indyref1 impacted on economic volatility, the report found it had little effect compared to other factors like brexit, the eurozone crisis and even general elections.

Indyref1 and volatility.

The people behind that report concluded.

There is some evidence of a correlation between the referendum – and indeed even the Smith Commission process – and the relative volatility in Scottish stocks. But, when this relative difference is put in context of overall measures of volatility, the independence referendum does not appear to have been a major driver of volatility of either the FTSE or Scottish series compared to other events around this time. We find that global events – such as the Eurozone debt crisis – tended to have a much more significant impact.