Geography, Migrations and Equilibrium Unemployment

Paolo Epifani and Gino Gancia

No 156, Development Working Papers from Centro Studi Luca d'Agliano, University of Milano

Abstract: We study the effect of trade integration on the regional coevolution of income, migrations, and unemployment in a dynamic coreperiphery model with limited labor mobility and frictions in the job matching process. Our model can help explain a recently documented empirical puzzle, i.e., the divergence of unemployment rates, together with low migrations and modest income convergence experienced by European regions over the last twenty years. By studying explicitly the transitional dynamics of the model, we also highlight a contrast between short run and long run effects of trade and policy shocks on a geographically differentiated economy.

Keywords: Integration; Agglomeration; Regional Unemployment; Europe (search for similar items in EconPapers)
JEL-codes: F12 F15 F16 (search for similar items in EconPapers)
Date: 2001-07-01
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Citations: View citations in EconPapers (4)

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Working Paper: Geography, Migrations and Equilibrium Unemployment (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:csl:devewp:156

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