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Immigration and Secular Stagnation

Author

Listed:
  • Kaz Miyagiwa

    (Department of Economics, Florida International University)

  • Yoshiyasu Ono

    (Institute of Social and Economic Research, Osaka University)

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.

Suggested Citation

  • Kaz Miyagiwa & Yoshiyasu Ono, 2024. "Immigration and Secular Stagnation," Working Papers 2403, Florida International University, Department of Economics.
    • Handle: RePEc:fiu:wpaper:2403
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    File URL: https://economics.fiu.edu/research/working-papers/2024/2403.pdf
    File Function: First version, 2024
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    More about this item

    Keywords

    immigration; secular stagnation; unemployment; aggregate demand; remittances;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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