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Here in the U.S., the stock market didn't react so favorably to Britain's historic vote. The Dow and S&P 500 both fell more than 3 percent. The NASDAQ closed down about 4 percent. NPR's Chris Arnold looks at what Brexit might mean for the American economy.
CHRIS ARNOLD, BYLINE: The short-term effects we can see already - the stock market reaction, a stronger dollar - but Harvard economist Ken Rogoff says...
KEN ROGOFF: The big question is what happens to the future of the world.
ARNOLD: Oh, so it's not that big a question that you're asking. It's just what happens to the future of the world.
ARNOLD: That's a pretty big question.
ROGOFF: Oh, this is - this is huge. It's hard to know because we've never seen it. You know, you don't want to be hyperbolic, but this is shocking.
ARNOLD: Rogoff studies the global economy and financial crises. And he says that the U.K. and the entire European continent are crucial trading partners for the U.S., so damage across the Atlantic will be felt here, too. The question is how much economic fallout will there be?
ROGOFF: If this is the match that, you know, lights the fire in Europe, it's not going to be a pretty picture for the U.S. I mean, I don't think it's going to be the same as 2008, but it's certainly going to hurt our economy. It's not going to be good.
ARNOLD: But Rogoff says he doesn't want to exaggerate the risk of that because we just don't know what's going to happen.
ROGOFF: It could be the whole thing's really smooth. Europe just says, well, you know, here's the deal like Norway and Switzerland have. Sorry not to have you. Have a good life.
ARNOLD: Norway and Switzerland are not in the EU, but they have close connections with the union. The big worry now is that this won't just be the U.K. and that other countries will want to follow suit, and that will cause more pain across Europe and, therefore, more pain here in the U.S. Megan Greene is chief economist at John Hancock. She's over in the U.K. watching all this unfold.
MEGAN GREENE: If we end up having EU countries peel out of the EU more than just the U.K., that's a real threat for the entire global economy, and we could see the U.S. tipped into recession.
ARNOLD: Still, at this point, Rogoff and Greene both say that the odds seem good that the U.S. will weather the storm with only a minor drag on the economy. Alan Blinder is a former vice chairman of the Federal Reserve. He says there are actually some benefits for the U.S. from the turmoil in Europe.
ALAN BLINDER: Investors are going to flee from the U.K. and probably from a number of other countries in the EU and look for safe havens.
ARNOLD: Just one way that that could help the U.S. is that as investors buy U.S. treasuries, that should have the effect of keeping interest rates low for all kinds of loans that millions of people here make payments on - for example, mortgages and car loans. And that could mean more money in those people's pockets.
BLINDER: My sort of mental image - let's put it that way - of interest rates in the United States three months, six months, 12 months from now have gone down - lower interest rates.
ARNOLD: Meanwhile, President Obama said today that economic and financial officials in the U.S., the U.K., and Europe will remain in close contact and focused on ensuring economic growth and stability. Chris Arnold, NPR News.
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