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Labor mobility within currency unions

Author: Emmanuel Farhi; Iván Werning; National Bureau of Economic Research,
Publisher: Cambridge, Mass. : National Bureau of Economic Research, 2014.
Series: Working paper series (National Bureau of Economic Research), no. 20105.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Database:WorldCat
Summary:
We study the effects of labor mobility within a currency union suffering from nominal rigidities. When the demand shortfall in depressed region is mostly internal, migration may not help regional macroeconomic adjustment. When external demand is also at the root of the problem, migration out of depressed regions may produce a positive spillover for stayers. We consider a planning problem and compare its solution to  Read more...
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Details

Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Emmanuel Farhi; Iván Werning; National Bureau of Economic Research,
OCLC Number: 879592259
Notes: "May 2014"
Description: 1 online resource (26 pages).
Series Title: Working paper series (National Bureau of Economic Research), no. 20105.
Responsibility: Emmanuel Farhi, Iván Werning.

Abstract:

We study the effects of labor mobility within a currency union suffering from nominal rigidities. When the demand shortfall in depressed region is mostly internal, migration may not help regional macroeconomic adjustment. When external demand is also at the root of the problem, migration out of depressed regions may produce a positive spillover for stayers. We consider a planning problem and compare its solution to the equilibrium. We find that the equilibrium is generally constrained inefficient, although the welfare losses may be small if the economy suffers mainly from internal demand imbalances.

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