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

Author

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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 significant 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. Specifically, 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, explaining the structural current account deficits that most of them face.

Suggested Citation

  • Dramane Coulibaly & Blaise Gnimassoun & Valérie Mignon, 2018. "The tale of two international phenomena: International migration and global imbalances," Working Papers of BETA 2018-10, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    • Handle: RePEc:ulp:sbbeta:2018-10
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    Cited by:

    1. Gniniguè, Moukpè & Awade, Essossolim, 2023. "Diaspora as Driver of Agricultural Structural Transformation in West Africa," African Journal of Economic Review, African Journal of Economic Review, vol. 11(3), June.
    2. Florian Morvillier, 2018. "On the impact of the launch of the euro on EMU macroeconomic vulnerability," EconomiX Working Papers 2018-51, University of Paris Nanterre, EconomiX.
    3. Florian Morvillier, 2018. "On the impact of the launch of the euro on EMU macroeconomic vulnerability," Working Papers hal-04141675, HAL.

    More about this item

    Keywords

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    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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