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International Migration of Labor, Efficiency Wages, and Monetary Policies


  • Shimada, Akira

    () (Nagasaki University)


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

Suggested Citation

  • Shimada, Akira, 2007. "International Migration of Labor, Efficiency Wages, and Monetary Policies," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 22, pages 50-68.
  • Handle: RePEc:ris:integr:0385

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    More about this item


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

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts


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