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The Simple Analytics of Neoclassical Growth with Migration

Author

Listed:
  • Luca Correani
  • Fabio Di Dio
  • Stefano Patrì

Abstract

This paper investigates the economic consequences of migration in the Ramsey-type dynamic optimizing context. In contrast to Hazari and Sgro (2003) conclusions, we show that with a Cobb-Douglas production function migration unambiguously reduces per-capita domestic consumption growth, whereas necessarily raises the long-run per-capita consumption of domestic residents when production is “sufficiently" capital intensive. Our findings are supported by several empirical studies and confirmed by simulation analyses in an international context, suggesting that changes in technological adjustment in response to migrants inflows may take some years to translate into productivity, generating some crowding out effects. The gains for natives materialize in the long run when the specialization of natives adjusts, firms invest in capital and adopt appropriate technologies.

Suggested Citation

  • Luca Correani & Fabio Di Dio & Stefano Patrì, "undated". "The Simple Analytics of Neoclassical Growth with Migration," Working Papers 9, Department of the Treasury, Ministry of the Economy and of Finance.
  • Handle: RePEc:itt:wpaper:wp2011-9
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    More about this item

    Keywords

    Migration; Domestic consumption; Growth;

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business

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