International Migration of Labor, Efficiency Wages, and Monetary Policies
AbstractAssuming a symmetric two-country economy with labor migration and efficiency wages, we investigate which of the two regimes, non-cooperation or intergovernment cooperation, is advantageous. We show that not only the utility of the policy authority but also that of the workers is higher under inter-government cooperation than under non-cooperation, provided that migration flows are sufficiently sensitive to changes in real-consumption wage differentials. Our result is in contrast to the one derived by Agiomirgianakis (1998); according to him, in a two-country economy with labor migration and labor unions, only the policy authority can attain the higher utility under inter-government cooperation
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Bibliographic InfoArticle provided by Center for Economic Integration, Sejong University in its journal Journal of Economic Integration.
Volume (Year): 22 (2007)
Issue (Month): ()
Monetary policy games; International migration of labor; Efficiency wages; Two-country economy;
Find related papers by JEL classification:
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
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