IDEAS home Printed from https://ideas.repec.org/a/taf/apeclt/v24y2017i16p1138-1142.html
   My bibliography  Save this article

The European refugee crisis and the natural rate of output

Author

Listed:
  • Katja Heinisch
  • Klaus Wohlrabe

Abstract

The European Commission follows a harmonized approach for calculating structural (potential) output for EU member states that takes into account labour as an important ingredient. This article shows how the recent huge migrants’ inflow to Europe affects trend output. Due to the fact that the immigrants immediately increase the working population but effectively do not enter the labour market, we illustrate that the potential output is potentially upward biased without any corrections. Taking Germany as an example, we find that the average medium-term potential growth rate is lower if the migration flow is modelled adequately compared to results based on the unadjusted European Commission procedure.

Suggested Citation

  • Katja Heinisch & Klaus Wohlrabe, 2017. "The European refugee crisis and the natural rate of output," Applied Economics Letters, Taylor & Francis Journals, vol. 24(16), pages 1138-1142, September.
    • Handle: RePEc:taf:apeclt:v:24:y:2017:i:16:p:1138-1142
    DOI: 10.1080/13504851.2016.1259741
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13504851.2016.1259741
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13504851.2016.1259741?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Herbert Brücker & Elke J. Jahn, 2011. "Migration and Wage‐setting: Reassessing the Labor Market Effects of Migration," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113, pages 286-317, June.
    2. Francesca D'Auria & Cécile Denis & Karel Havik & Kieran Mc Morrow & Christophe Planas & Rafal Raciborski & Werner Roger & Alessandro Rossi, 2010. "The production function methodology for calculating potential growth rates and output gaps," European Economy - Economic Papers 2008 - 2015 420, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    3. Karel Havik & Kieran Mc Morrow & Fabrice Orlandi & Christophe Planas & Rafal Raciborski & Werner Roeger & Alessandro Rossi & Anna Thum-Thysen & Valerie Vandermeulen, 2014. "The Production Function Methodology for Calculating Potential Growth Rates & Output Gaps," European Economy - Economic Papers 2008 - 2015 535, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    4. Projektgruppe Gemeinschaftsdiagnose, 2016. "Gemeinschaftsdiagnose Frühjahr 2016: Aufschwung bleibt moderat – Wirtschaftspolitik wenig wachstumsorientiert," Wirtschaft im Wandel, Halle Institute for Economic Research (IWH), vol. 22(2), pages 25-25.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Timo Wollmershäuser & Wolfgang Nierhaus & Nikolay Hristov & Dorine Boumans & Johanna Garnitz & Marcell Göttert & Christian Grimme & Stefan Lauterbacher & Robert Lehmann & Wolfgang Meister & Magnus Rei, 2016. "ifo Konjunkturprognose 2016–2018: Robuste deutsche Konjunktur vor einem Jahr ungewisser internationaler Wirtschaftspolitik," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 69(24), pages 28-73, December.
    2. Breuer Sebastian & Elstner Steffen, 2020. "Germany’s Growth Prospects against the Backdrop of Demographic Change," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 240(5), pages 565-605, October.
    3. Timo Wollmershäuser & Marcell Göttert & Christian Grimme & Carla Krolage & Stefan Lautenbacher & Robert Lehmann & Sebastian Link & Wolfgang Nierhaus & Ann-Christin Rathje & Magnus Reif & Radek Šauer &, 2018. "ifo Konjunkturprognose Winter 2018: Deutsche Konjunktur kühlt sich ab," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 71(24), pages 28-82, December.
    4. Timo Wollmershäuser & Wolfgang Nierhaus & Nikolay Hristov & Dorine Boumans & Marcell Göttert & Christian Grimme & S. Lauterbacher & Robert Lehmann & Wolfgang Meister & Andreas Peichl & Magnus Reif & F, 2017. "ifo Konjunkturprognose 2017/2018: Deutsche Wirtschaft stark und stabil," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 70(12), pages 30-83, June.
    5. Timo Wollmershäuser & Marcell Göttert & Christian Grimme & Carla Krolage & Stefan Lautenbacher & Robert Lehmann & Sebastian Link & Wolfgang Nierhaus & Ann-Christin Rathje & Magnus Reif & Anna-Pauliina, 2019. "ifo Konjunkturprognose Sommer 2019: Deutsche Konjunktur ohne Schwung," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 72(12), pages 25-78, June.
    6. Timo Wollmershäuser & Silvia Delrio & Marcell Göttert & Christian Grimme & Jochen Güntner & Carla Krolage & Stefan Lautenbacher & Robert Lehmann & Sebastian Link & Wolfgang Nierhaus & Magnus Reif & Ra, 2018. "ifo Konjunkturprognose Sommer 2018: Gewitterwolken am deutschen Konjunkturhimmel," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 71(12), pages 33-87, June.
    7. Breuer, Sebastian & Elstner, Steffen, 2017. "Die Wachstumsperspektiven der deutschen Wirtschaft vor dem Hintergrund des demografischen Wandels: Die Mittelfristprojektion des Sachverständigenrates," Working Papers 07/2017, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung.
    8. Timo Wollmershäuser & Silvia Delrio & Clemens Fuest & Marcell Göttert & Christian Grimme & Carla Krolage & Stefan Lautenbacher & Robert Lehmann & Wolfgang Nierhaus & Andreas Peichl & Magnus Reif & Rad, 2017. "ifo Konjunkturprognose 2017–2019: Deutsche Wirtschaft auf dem Weg in die Hochkonjunktur," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 70(24), pages 28-81, December.
    9. Timo Wollmershäuser & Florian Eckert & Marcell Göttert & Christian Grimme & Carla Krolage & Stefan Lautenbacher & Robert Lehmann & Sebastian Link & Heiner Mikosch & Stefan Neuwirth & Wolfgang Nierhaus, 2019. "ifo Konjunkturprognose Winter 2019: Deutsche Konjunktur stabilisiert sich," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 72(24), pages 27-89, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lorenzo Burlon & Paolo D'Imperio, 2019. "The euro-area output gap through the lens of a DSGE model," Questioni di Economia e Finanza (Occasional Papers) 477, Bank of Italy, Economic Research and International Relations Area.
    2. Hayk Karapetyan, 2019. "Estimating Potential Output at the Central Bank of Armenia," Working Papers 12, Central Bank of the Republic of Armenia.
    3. Mellár, Tamás & Németh, Kristóf, 2018. "A kibocsátási rés becslése többváltozós állapottérmodellekben. Szuperhiszterézis és további empirikus eredmények [Estimating output gap in multivariate state space models. Super-hysteresis and furt," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 557-591.
    4. Federico Bassi, 2020. "Chronic Excess Capacity and Unemployment Hysteresis in EU Countries. A Structural Approach," DISCE - Working Papers del Dipartimento di Economia e Finanza def091, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    5. Cláudia Duarte & José R. Maria & Sharmin Sazedj, 2021. "Cyclical outputs and structural budget balances," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    6. Brian Micallef, 2017. "Empirical Estimates of Okun¡¯s Law in Malta," Applied Economics and Finance, Redfame publishing, vol. 4(1), pages 138-148, January.
    7. Hennecke, Peter, 2017. "Zinstransmission in der Niedrigzinsphase: Eine empirische Untersuchung des Zinskanals in Deutschland," Thuenen-Series of Applied Economic Theory 150, University of Rostock, Institute of Economics.
    8. Michał Brzoza-Brzezina & Jacek Kotłowski, 2021. "International confidence spillovers and business cycles in small open economies," Empirical Economics, Springer, vol. 61(2), pages 773-798, August.
    9. Gilles Mourre & Aurélien Poissonnier, 2019. "What Drives the Responsiveness of the Budget Balance to the Business Cycle in EU Countries?," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 54(4), pages 237-249, July.
    10. Ademmer, Martin & Boysen-Hogrefe, Jens & Carstensen, Kai & Hauber, Philipp & Jannsen, Nils & Kooths, Stefan & Rossian, Thies & Stolzenburg, Ulrich, 2019. "Schätzung von Produktionspotenzial und -lücke: Eine Analyse des EU-Verfahrens und mögliche Verbesserungen," Open Access Publications from Kiel Institute for the World Economy 193965, Kiel Institute for the World Economy (IfW).
    11. Marcell Göttert & Timo Wollmershäuser, 2021. "Survey-Based Structural Budget Balances," CESifo Working Paper Series 8911, CESifo.
    12. Heinz Gebhardt & Lars-H. R. Siemers, 2018. "Zur strukturellen Finanzlage der Länder: eine aktuelle Auswertung und Methodenkritik," Volkswirtschaftliche Diskussionsbeiträge 188-18, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
    13. Hennecke, Peter, 2017. "The interest rate pass-through in the low interest rate environment: Evidence from Germany," Thuenen-Series of Applied Economic Theory 151, University of Rostock, Institute of Economics.
    14. Andrejs Bessonovs & Olegs Tkacevs, 2016. "Relationship Between Inflation and Economic Activity and Its Variation Over Time in Latvia," Working Papers 2016/03, Latvijas Banka.
    15. Klaus Weyerstrass, 2018. "How to Boost Productivity in the EU," EconPol Policy Brief 8, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    16. Breuer, Sebastian & Elstner, Steffen, 2017. "Die Wachstumsperspektiven der deutschen Wirtschaft vor dem Hintergrund des demografischen Wandels: Die Mittelfristprojektion des Sachverständigenrates," Working Papers 07/2017, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung.
    17. Ademmer, Martin & Boysen-Hogrefe, Jens & Carstensen, Kai & Hauber, Philipp & Jannsen, Nils & Kooths, Stefan & Rossian, Thies & Stolzenburg, Ulrich, 2019. "Schätzung von Produktionspotenzial und -lücke: Eine Analyse des EU-Verfahrens und mögliche Verbesserungen," Kieler Beiträge zur Wirtschaftspolitik 19, Kiel Institute for the World Economy (IfW Kiel).
    18. Susanne Maidorn, 2018. "Is there a trade-off between procyclicality and revisions in EC trend TFP estimations?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 45(1), pages 59-82, February.
    19. Sebastian Gechert & Katja Rietzler & Silke Tober, 2016. "The European Commission's new NAIRU: Does it deliver?," Applied Economics Letters, Taylor & Francis Journals, vol. 23(1), pages 6-10, January.
    20. Alessandro Cianci, 2016. "Disoccupazione strutturale in Italia e regole europee di bilancio," a/ Working Papers Series 1601, Italian Association for the Study of Economic Asymmetries, Rome (Italy).

    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:apeclt:v:24:y:2017:i:16:p:1138-1142. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEL20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.