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International worker mobility and the effects of monetary policy shocks

Author

Listed:
  • Wataru Johdo

    (Tokyo Keizai University)

Abstract

In this paper, we develop a new open economy macroeconomics model that incorporates international worker mobility and nominal wage rigidities. The driving force for relocation of workers is differences in real wages between home- and foreign-located workers. An unanticipated domestic monetary expansion proves to produce not only changes in the nominal exchange rate, but also worker relocation through changes in the wage gap. We show that the degree of worker mobility provides the key to understanding the macroeconomic impacts of monetary expansion.

Suggested Citation

  • Wataru Johdo, 2022. "International worker mobility and the effects of monetary policy shocks," Economics Bulletin, AccessEcon, vol. 42(2), pages 523-535.
    • Handle: RePEc:ebl:ecbull:eb-20-00937
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    File URL: http://www.accessecon.com/Pubs/EB/2022/Volume42/EB-22-V42-I2-P44.pdf
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    More about this item

    Keywords

    International worker mobility; Monetary policy; Exchange rate; Consumption; Welfare;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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