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The tale of two international phenomena: International migration and global imbalances

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  • Dramane Coulibaly
  • Blaise Gnimassoun
  • Valérie Mignon

Abstract

Following the dynamics of globalization, international migration has increased dramatically since the 1990s. Given that these migrations may obscure the natural demographic structure of nations, they are likely to explain a signifcant part of global imbalances. This paper tackles this issue by investigating the role played by international migration in the dynamics of global imbalances. To this end, we rely on an overlapping generations model to derive the theoretical relationship between international migration and current account position. Through a series of robust estimates, we empirically investigate this relationship by relying on a panel of 157 developed and developing countries over the period 1990-2014. Our results point to substantial effects of international migration. Specifcally, we show that an increase in migration improves national savings and the current account balance in the destination country, while it has opposite impacts in the origin country. These effects are particularly pronounced in developing economies, and attenuated by migrants' remittances.

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  • Dramane Coulibaly & Blaise Gnimassoun & Valérie Mignon, 2018. "The tale of two international phenomena: International migration and global imbalances," Working Papers 2018-02, CEPII research center.
  • Handle: RePEc:cii:cepidt:2018-02
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    More about this item

    Keywords

    International Migration; Current Account; Global Imbalances; Remittances;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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