Immigration and Secular Stagnation

Kaz Miyagiwa () and Yoshiyasu Ono
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Kaz Miyagiwa: Department of Economics, Florida International University

No 2403, Working Papers from Florida International University, Department of Economics

Abstract: We examine the effect of international immigration on the host-country economy in the dynamic model capable of generating full employment as well as secular unemployment in equilibrium. It is shown that the effect of immigration depends on the host country's employment conditions and immigration magnitudes. If full employment prevails initially, a small inflow of immigrants boosts aggregate demand and improves welfare for host-country residents; a massive influx of immigrants leads to secular stagnation. If unemployment prevails initially, immigration always decreases aggregate demand and worsens unemployment. Furthermore, remittances by immigrants are always harmful to the host country under full employment but can beneficial under stagnation.

Keywords: immigration; secular stagnation; unemployment; aggregate demand; remittances (search for similar items in EconPapers)
JEL-codes: F16 F22 J61 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2024-05
New Economics Papers: this item is included in nep-int and nep-ure
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https://economics.fiu.edu/research/working-papers/2024/2403.pdf First version, 2024 (application/pdf)

Related works:
Working Paper: Immigration and Secular Stagnation (2019)
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