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Migration and trade with external economies of scale

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  • Collie, David R.

    ()
    (Cardiff Business School)

Abstract

The analysis of migration in Findlay (1982) is extended by adding external economies of scale to the Ricardian model as in Ethier (1982). With external economies, the larger country always gains from trade but the smaller country may lose from trade unless the external economies of scale are sufficiently strong. The smaller country will always gain from emigration but the larger country may lose from immigration unless the external economies of scale are sufficiently strong. Both countries gain from complete economic integration (free labour migration with free trade). Finally, the optimal migration policies of the two countries are derived.

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Bibliographic Info

Paper provided by Cardiff University, Cardiff Business School, Economics Section in its series Cardiff Economics Working Papers with number E2007/23.

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Length: 34 pages
Date of creation: Aug 2007
Date of revision:
Handle: RePEc:cdf:wpaper:2007/23

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Keywords: Immigration; emigration; international trade; factor mobility;

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