International Migration and Remittances in a Two‐country Temporary Equilibrium Model
In: Journal of economic studies, Volume 18, Issue 2
ISSN: 1758-7387
Open economy macroeconomic models generally overlook the effects of
international migration and remittances on income and welfare. A
two‐country temporary equilibrium model is presented which incorporates
trade theoretic elements of international migration and remittances. In
the model, an expansionary incomes, or a trade, policy by the host
country induces migration, while expansionary demand policies in the
source country discourage migration. In all cases, however, when some
degree of international migration exists, potential income and welfare
gains to both countries induced by such policies exceed the equivalent
policy gains where international migration and remittances are absent.