Scottish independence: Leading American economists predict 'extreme economic pain' after Yes vote

Experts at Harvard and Yale echoed concerns about keeping the pound

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The Independent Online

A US survey of some of the world’s leading business professors has suggested Scotland will suffer “extreme economic pain” if it votes for independence tomorrow.

Research carried out by the University of Chicago Booth School of Business showed that the experts surveyed agreed broadly that the macroeconomic consequences of secession, including unemployment, inflation and national income, could be severe.

When asked whether there would be “greater macroeconomic instability for Scotland for many years”, almost 70 per cent of professors surveyed agreed – 62 per cent strongly.

“Splitting equals extreme economic pain,” said Anil Kashyap, of the Booth School of Business.

He argued that with budget concerns and monetary challenges, it is best to keep the union between Scotland and England, Wales, and Northern Ireland.

But other experts thought the consequences of secession were less clear, especially as the question of what currency an independent Scotland would use is unresolved.

Experts from Harvard University were among those in the study

Larry Samuelson, an economics professor at Yale University, said: “Pegging the Scottish to the English pound might essentially replicate the current state of affairs.”

Meanwhile, Oliver Hart of Harvard argued if the issues of currency and Scotland’s position within Europe are resolved, “things may be OK”, while calling a Scottish pound a “bad idea”.

Robert Hall, from Stanford University, took the opposite position to many of his colleagues, forecasting a better economic outlook.

“Small English-speaking countries have excellent records” for macroeconomic stability, he said.

The economy of an independent Scotland has become the subject of furious debate between the Yes and No camps as tomorrow’s vote approaches.

Claim and counter-claim has been traded by both sides, with Alex Salmond claiming “no one can stop” Scotland keeping the pound, despite George Osborne’s assertions to the contrary.

Leading businesses have also expressed concern, with some threatening to move jobs out of the country if it leaves the UK.

Downing Street denied the First Minister’s claims of a “scaremongering campaign”.