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The European refugee crisis and the natural rate of output


  • Heinisch, Katja
  • Wohlrabe, Klaus


The European Commission follows a harmonized approach for calculating structural (potential) output for EU member states that takes into account labor as an important ingredient. This paper shows how the recent huge migrants inflow to Europe affects trend output. Due to the fact that the immigrants immediately increase the working population but effectively do not enter the labor market, we illustrate that the potential output is potentially upward biased without any corrections. Taking Germany as an example, we find that the average medium-term potential growth rate is lower if the migration flow is modeled adequately compared to results based on the unadjusted European Commission procedure.

Suggested Citation

  • Heinisch, Katja & Wohlrabe, Klaus, 2016. "The European refugee crisis and the natural rate of output," MPRA Paper 74905, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:74905

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    References listed on IDEAS

    1. Herbert Brücker & Elke J. Jahn, 2011. "Migration and Wage‐setting: Reassessing the Labor Market Effects of Migration," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113, pages 286-317, June.
    2. Projektgruppe Gemeinschaftsdiagnose, 2016. "Gemeinschaftsdiagnose Frühjahr 2016: Aufschwung bleibt moderat – Wirtschaftspolitik wenig wachstumsorientiert," Wirtschaft im Wandel, Halle Institute for Economic Research (IWH), vol. 22(2), pages 1-25.
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    Cited by:

    1. Timo Wollmershäuser & Wolfgang Nierhaus & Nikolay Hristov & Dorine Boumans & Johanna Garnitz & Marcell Göttert & Christian Grimme & Stefan Lauterbacher & Robert Lehmann & Wolfgang Meister & Magnus Rei, 2016. "ifo Konjunkturprognose 2016–2018: Robuste deutsche Konjunktur vor einem Jahr ungewisser internationaler Wirtschaftspolitik," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 69(24), pages 28-73, December.
    2. repec:ces:ifosdt:v:71:y:2018:i:12:p:33-87 is not listed on IDEAS
    3. repec:ces:ifosdt:v:71:y:2018:i:24:p:28-82 is not listed on IDEAS
    4. Breuer, Sebastian & Elstner, Steffen, 2017. "Die Wachstumsperspektiven der deutschen Wirtschaft vor dem Hintergrund des demografischen Wandels: Die Mittelfristprojektion des Sachverständigenrates," Working Papers 07/2017, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung.
    5. repec:ces:ifosdt:v:70:y:2017:i:12:p:30-83 is not listed on IDEAS
    6. repec:ces:ifosdt:v:70:y:2017:i:24:p:28-81 is not listed on IDEAS
    7. repec:ces:ifosdt:v:72:y:2019:i:12:p:25-78 is not listed on IDEAS

    More about this item


    migration; refugee crisis; natural rate of output; filtering; EU-commission;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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