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Dynamic Macroeconomic Implications of Immigration

Conny Olovsson, Karl Walentin () and Andreas Westermark ()

No 405, Working Paper Series from Sveriges Riksbank (Central Bank of Sweden)

Abstract: International immigration flows are large, volatile and have recently increased. This paper is the first to study the dynamic effects of immigration shocks on the economy within a search and matching framework. Since the microdata indicates that some of the key macroeconomic effects of immigration are largest in the short run, a steady state analysis would be insufficient. To construct a quantitatively relevant general equilibrium framework, we use extensive Swedish microdata. We then study the effect of a large immigration shock on various macroeconomic aggregates. Due to compositional effects, there is a substantial negative effect on GDP per capita and the employment rate on impact that then decreases over time.

Keywords: Immigration; dynamics; search and matching (search for similar items in EconPapers)
JEL-codes: J21 J31 J61 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2021-10-01
New Economics Papers: this item is included in nep-cwa, nep-dge, nep-int, nep-mac and nep-mig
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