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Migration and trade with external economies of scale

David Collie

No E2007/23, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: The analysis of migration in Findlay (1982) is extended by adding external economies of scale to the Ricardian model as in Ethier (1982). With external economies, the larger country always gains from trade but the smaller country may lose from trade unless the external economies of scale are sufficiently strong. The smaller country will always gain from emigration but the larger country may lose from immigration unless the external economies of scale are sufficiently strong. Both countries gain from complete economic integration (free labour migration with free trade). Finally, the optimal migration policies of the two countries are derived.

Keywords: Immigration; emigration; international trade; factor mobility (search for similar items in EconPapers)
JEL-codes: F22 F12 J61 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int and nep-mig
Date: 2007-08
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