The tale of two international phenomena: Migration and global imbalances

Dramane Coulibaly, Blaise Gnimassoun and Valérie Mignon ()

Journal of Macroeconomics, 2020, vol. 66, issue C

Abstract: Following the dynamics of globalization, international migration has increased dramatically since the 1990s. Since migration patterns affect a country’s demographic structure—which is known to have an impact on the current account—migration is likely to explain a significant part of world 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 link between international migration and the current account position. Through a series of robust estimates, we empirically investigate this relationship by relying on a large panel of developed and developing countries. Our results point to substantial effects of international migration. Specifically, we show that an increase in migration augments national savings and tends to restore 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 and are attenuated by migrants’ remittances.

Keywords: International migration; Current account; Global imbalances; Remittances (search for similar items in EconPapers)
JEL-codes: C33 F22 F32 O55 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:66:y:2020:i:c:s0164070420301671

DOI: 10.1016/j.jmacro.2020.103241

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