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Immigration and international prices

  • Zachariadis, Marios

This paper considers the relation between immigration and prices in a number of countries across the world over the period from 1990 to 2006. Immigration is shown to have a negative impact on international relative prices. A 10% increase in the share of immigrant workers in total employment decreases the prices of final products by as much as 3%. Our results suggest that the tendency of this factor of production to relocate to relatively expensive high-wage countries exerts downward pressure on prices of tradeables and non-tradeables there relative to other locations. The effect of immigration on prices is more evident for goods consumed by immigrants as compared to goods produced by immigrants.

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Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 87 (2012)
Issue (Month): 2 ()
Pages: 298-311

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Handle: RePEc:eee:inecon:v:87:y:2012:i:2:p:298-311
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  1. Ina Simonovska, 2009. "Income Differences and Prices of Tradables," 2009 Meeting Papers 692, Society for Economic Dynamics.
  2. Patricia Cortes, 2008. "The Effect of Low-Skilled Immigration on U.S. Prices: Evidence from CPI Data," Journal of Political Economy, University of Chicago Press, vol. 116(3), pages 381-422, 06.
  3. Andrew Atkeson & Ariel Burstein, 2008. "Pricing-to-market, trade costs, and international relative prices," Staff Report 404, Federal Reserve Bank of Minneapolis.
  4. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," NBER Working Papers 10480, National Bureau of Economic Research, Inc.
  5. Robert Lipsey & Birgitta Swedenborg, 2010. "Product price differences across countries: determinants and effects," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 146(3), pages 415-435, September.
  6. Samuel Bentolila & Juan J. Dolado & Juan F. Jimeno, 2007. "Does Immigration Affect the Phillips Curve? Some Evidence for Spain," Kiel Working Papers 1333, Kiel Institute for the World Economy.
  7. Alan T. Sorensen, 2000. "Equilibrium Price Dispersion in Retail Markets for Prescription Drugs," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 833-862, August.
  8. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
  9. Mark Aguiar & Erik Hurst, 2007. "Life-Cycle Prices and Production," American Economic Review, American Economic Association, vol. 97(5), pages 1533-1559, December.
  10. Charles Engel & John H. Rogers, 2004. "European product market integration after the euro," Economic Policy, CEPR;CES;MSH, vol. 19(39), pages 347-384, 07.
  11. Tommaso Frattini, 2012. "Immigrazione," Rivista di Politica Economica, SIPI Spa, issue 3, pages 363-407, July-Sept.
  12. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
  13. Stahl, Dale O, II, 1989. "Oligopolistic Pricing with Sequential Consumer Search," American Economic Review, American Economic Association, vol. 79(4), pages 700-712, September.
  14. Lach, Saul, 2005. "Immigration and Prices," CEPR Discussion Papers 5083, C.E.P.R. Discussion Papers.
  15. Zachariadis, Marios, 2011. "Immigration and international prices: An initial assessment," Economics Letters, Elsevier, vol. 110(2), pages 83-85, February.
  16. Philippe Andrade & Marios Zachariadis, 2010. "Trends in International Prices," University of Cyprus Working Papers in Economics 02-2010, University of Cyprus Department of Economics.
  17. Mario Crucini & Chris Telmer & Marios Zachariadis, . "Understanding European Real Exchange Rates," GSIA Working Papers 227, Carnegie Mellon University, Tepper School of Business.
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