Case Study: When a Country is Split

Alexander Denev

In this chapter, we show the application of Bayesian nets to the study of a major political event and its consequences. There are many events that attract attention for the analysis we shall present, but we believe that the Scottish referendum for independence (September 18, 2014) is a good example due to its relevance and the complexity that it entailed. It is an event whose outcome we already know – Scotland voted to stay in the UK – but nevertheless one we deem important as a case study. This is not only because political independence referendums or leaving/joining monetary unions with similar set-ups can occur in the future, but also because the macroeconomic relationships we analyse here are valid outside the Scottish referendum context. This shows the essence the approach of this book: every event is singular and we cannot give a universal example ready to be directly reused in the future. Each event deserves its own attention and a detailed analysis of its specificities is necessary. However, we should also leverage on similar past episodes or past relationships that are also likely to hold in the problem at hand.

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