A Dynamic General Equilibrium Analysis of Japanese & Korean Immigration
AbstractThis paper constructs a multi-sector dynamic general equilibrium model for a trading economy. We incorporate three major factors of production: capital, skilled labor & unskilled labor. We solve and calibrate the model using data from Japan and Korea. We then consider changes to immigration policy in both countries. We are able to examine the effects on output, consumption, wages, and utility. We do this for both the new steady state and for the time-path leading to that steady state. In addition, we are able, if we so wish, to impose a series of unrelated macroeconomic shock to the model. This has the advantage of allowing us to calculate confidence bands around our policy impulse response functions. We find that allowing skilled labor to immigrate leads to greater welfare gains in the steady state. We also show that there is a great deal of uncertainty surrounding the exact time path to a new steady state in the presence of the typical fluctuations associated with business cycles. We find a great deal of inertia in the transition to a new steady state.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 23501.
Date of creation: Apr 2010
Date of revision:
labor migration; factor mobility; dynamic general equilibrium; Japan; Korea; DSGE;
Find related papers by JEL classification:
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- F15 - International Economics - - Trade - - - Economic Integration
- F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-07-03 (All new papers)
- NEP-DGE-2010-07-03 (Dynamic General Equilibrium)
- NEP-MIG-2010-07-03 (Economics of Human Migration)
- NEP-OPM-2010-07-03 (Open Economy Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Goto, Junichi, 1998. "The impact of migrant workers on the Japanese economy: Trickle vs. flood," Japan and the World Economy, Elsevier, vol. 10(1), pages 63-83, January.
- Scott M. Fuess, 2003. "Immigration Policy and Highly Skilled Workers: The Case of Japan," Contemporary Economic Policy, Western Economic Association International, vol. 21(2), pages 243-257, 04.
- Lawrence J. Christiano, 1998.
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9804, Federal Reserve Bank of Cleveland.
- Christiano, Lawrence J, 2002. "Solving Dynamic Equilibrium Models by a Method of Undetermined Coefficients," Computational Economics, Society for Computational Economics, vol. 20(1-2), pages 21-55, October.
- Lawrence J. Christiano, 1998. "Solving Dynamic Equilibrium Models by a Method of Undetermined Coefficients," NBER Technical Working Papers 0225, National Bureau of Economic Research, Inc.
- Yong-Yil Choi, 2004. "The macroeconomic impact of foreign labour influx into the industrialized nation state and the complementary policies," Applied Economics, Taylor & Francis Journals, vol. 36(10), pages 1057-1063.
- Ryne Belliston & Scott Bradford & Kerk L. Phillips, 2014.
"The Dynamic Effects of Changes to Japanese Immigration Policy,"
BYU Macroeconomics and Computational Laboratory Working Paper Series
2014-02, Brigham Young University, Department of Economics, BYU Macroeconomics and Computational Laboratory.
- Phillips, Kerk L., 2010. "The Dynamic Effects of Changes to Japanese Immigration Policy," MPRA Paper 23673, University Library of Munich, Germany.
- Bradford, Scott C. & Kim, Dong-jin & Phillips, Kerk L., 2010. "Economic Reform in North Korea: A Dynamic General Equilibrium Model," MPRA Paper 23498, University Library of Munich, Germany.
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