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Migration and trade with external economies of scale

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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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  • Collie, David R., 2007. "Migration and trade with external economies of scale," Cardiff Economics Working Papers E2007/23, Cardiff University, Cardiff Business School, Economics Section.
    • Handle: RePEc:cdf:wpaper:2007/23
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    1. Richard B. Freeman, 2006. "People Flows in Globalization," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 145-170, Spring.
    2. Findlay, Ronald, 1982. "International distributive justice : A trade theoretic approach," Journal of International Economics, Elsevier, vol. 13(1-2), pages 1-14, August.
    3. Timothy J. Hatton, 2007. "Should we have a WTO for international migration? [‘The growth of world trade: Tariffs, transport costs and income similarity’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 22(50), pages 340-383.
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    5. Ethier, Wilfred J, 1982. "Decreasing Costs in International Trade and Frank Graham's Argument for Protection," Econometrica, Econometric Society, vol. 50(5), pages 1243-1268, September.
    6. Grossman, Gene M., 1984. "The gains from international factor movements," Journal of International Economics, Elsevier, vol. 17(1-2), pages 73-83, August.
    7. Panagariya, Arvind, 1981. "Variable Returns to Scale in Production and Patterns of Specialization," American Economic Review, American Economic Association, vol. 71(1), pages 221-230, March.
    8. Frank D. Graham, 1923. "Some Aspects of Protection Further Considered," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 37(2), pages 199-227.
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    Cited by:

    1. David R. Collie, 2009. "Auctioning Immigration Visas," Review of Development Economics, Wiley Blackwell, vol. 13(4), pages 687-694, November.

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    Keywords

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    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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