International Migration of Labor, Efficiency Wages, and Monetary Policies

Akira Shimada

Journal of Economic Integration, 2007, vol. 22, 50-68

Abstract:

Assuming a symmetric two-country economy with labor migration and efficiency wages, we investigate which of the two regimes, non-cooperation or intergovernment cooperation, is advantageous. We show that not only the utility of the policy authority but also that of the workers is higher under inter-government cooperation than under non-cooperation, provided that migration flows are sufficiently sensitive to changes in real-consumption wage differentials. Our result is in contrast to the one derived by Agiomirgianakis (1998); according to him, in a two-country economy with labor migration and labor unions, only the policy authority can attain the higher utility under inter-government cooperation

Keywords: Monetary policy games; International migration of labor; Efficiency wages; Two-country economy (search for similar items in EconPapers)
JEL-codes: F22 F41 F42 J41 (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0385

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