Phillips, Kerk L. (2010): A Dynamic General Equilibrium Analysis of Japanese & Korean Immigration.
Download (541Kb) | Preview
This paper constructs a multi-sector dynamic general equilibrium model for a trading economy. We incorporate three major factors of production: capital, skilled labor & unskilled labor. We solve and calibrate the model using data from Japan and Korea. We then consider changes to immigration policy in both countries. We are able to examine the effects on output, consumption, wages, and utility. We do this for both the new steady state and for the time-path leading to that steady state. In addition, we are able, if we so wish, to impose a series of unrelated macroeconomic shock to the model. This has the advantage of allowing us to calculate confidence bands around our policy impulse response functions.
We find that allowing skilled labor to immigrate leads to greater welfare gains in the steady state. We also show that there is a great deal of uncertainty surrounding the exact time path to a new steady state in the presence of the typical fluctuations associated with business cycles. We find a great deal of inertia in the transition to a new steady state.
|Item Type:||MPRA Paper|
|Original Title:||A Dynamic General Equilibrium Analysis of Japanese & Korean Immigration|
|Keywords:||labor migration; factor mobility; dynamic general equilibrium; Japan; Korea; DSGE|
|Subjects:||F - International Economics > F2 - International Factor Movements and International Business > F22 - International Migration
F - International Economics > F1 - Trade > F15 - Economic Integration
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F42 - International Policy Coordination and Transmission
|Depositing User:||Kerk Phillips|
|Date Deposited:||26. Jun 2010 17:57|
|Last Modified:||12. Feb 2013 18:11|
Choi, Yong-Yil. (2004) “The Macroeconomic Impact of Foreign Labour Influx into the Industrialized Nation State and the Complementary Policies,” Applied Economics, vol. 36, pp. 1057-1063.
Christiano, Lawrence J. (2002), “Solving Dynamic Equilibrium Models by a Method of Undetermined Coefficients,” Computational Economics, vol. 20, no. 1-2, pp. 21-55.
Fuess, Scott M. Jr. (2003) “Immigration Policy and Highly Skilled Workers: The Case of Japan,” Contemporary Economic Policy, vol. 21 no. 2, pp. 243-57.
Goto, Junichi. (1998) “The Impact of Migrant Workers on the Japanese Economy: Trickle vs. Flood,” Japan and the World Economy, vol. 10, pp. 63-83.
Phillips, Kerk. (2010) “Linearization about the Current State: A Computational Method for Approximating Nonlinear Policy Functions,” mimeo.
Uhlig, Harald. (1999), “A Toolkit for Analyzing Nonlinear Dynamic Stochastic Models Easily,” in Computational Methods for the Study of Dynamic Economies, Marimon and Scott, eds., Oxford University Press, pp. 30-61.
Available Versions of this Item
- A Dynamic General Equilibrium Analysis of Japanese & Korean Immigration. (deposited 26. Jun 2010 17:57) [Currently Displayed]