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International Migration of Labor, Efficiency Wages, and Monetary Policies


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  • Shimada, Akira

    (Nagasaki University)

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    Assuming 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 Info

    Article provided by Center for Economic Integration, Sejong University in its journal Journal of Economic Integration.

    Volume (Year): 22 (2007)
    Issue (Month): ()
    Pages: 50-68

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    Handle: RePEc:ris:integr:0385

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    Related research

    Keywords: Monetary policy games; International migration of labor; Efficiency wages; Two-country economy;

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