the drivers of international migration to the uk a panel based bayesian model averaging approach a heterogeneous panel based bayesian model averaging approach is used to identify the robust economic and policy drivers of international migration to the uk from 14 different source regions over 1980 2007 around three quarters of the increase in net immigration over the last decade which is particularly pronounced for selected source regions is associated with structural change which may be attributed to uk and foreign immigration policy the remainder of the rise is largely explained by friends and family effects there are considerable uncertainties associated both with the effects of particular economic drivers of immigration and with forecasts of immigration

the impact of immigration comparing two global eras summary this paper asks whether history can inform modern debate about immigration s impact on high wage economies it examines the relationship between migration s labor market impact and capital flows before 1914 the first global era it then assesses the effects of immigration on wages and employment with and without international capital mobility today in the second global era it then explores the links between these economic relationships welfare burdens and immigration policy it concludes with an explanation for the apparent difference in immigration s impact in the two global eras and thus on policy

explaining us immigration 1971 1998 abstract in this paper we develop and estimate a model to explain variations in immigration to the united states by source country since the early 1970s the explanatory variables include ratios to the united states of source country income and education as well as relative inequality in addition we incorporate the stock of previous immigrants and a variety of variables representing different dimensions of the immigration quotas set by policy we use the results to shed light on the impact of policy by simulating the effects of the key changes in immigration policy since the late 1970s we also examine the factors that influenced the composition of u s immigration by source region over the entire period

origins of the developing countries debt crisis 1970 to 1982 abstract this paper reports on an attempt to quantify the relative contribution of global conditions and domestic policies to the origins of individual countries debt difficulties the need for systematic quantification is beyond doubt but there is no satisfactory methodology for estimation on a comparable basis across countries this paper provides some preliminary results and highlights some of the methodological difficulties that must be confronted in such an effort the results for 19 countries must be interpreted with care but nonetheless underscore the significant differences among developing countries in the origins of and response to debt difficulties recognition of this diversity is important for understanding the present positions of many developing countries and assessing the needed shifts in policy if there is to be an acceptable resolution to the difficulties

labor market discrimination in a poor urban economy labor market discrimination by sex and by race in a poor urban economy is analyzed using a survey of manufacturing employees in tanzania there are large differences in mean wages by both sex and race using techniques previously applied to developed countries it is found that whereas the sex difference in mean wages can be explained mainly in terms of sex differences in personal characteristics the race difference is mainly the result of wage and job discrimination an attempt is made to explain the results which run counter to common presuppositions about discrimination

on the redundancy of the implicit welfarist axiom in bargaining theory abstract nash s characterization of his famous bargaining solution has long faced the objection of being welfarist a bargaining situation is captured by a utility possibility set and a utility vector prevailing in case of disagreement with no further information regarding the underlying economic environment the present paper shows that a straightforward adaptation of nash s axioms in a natural economic environment with lotteries does characterize his solution a similar result holds for kalai and smorodinsky s 8 characterization of their solution if and only if the domain contains multiple goods the non welfarist characterization of the nash solution extends to a larger class of preferences that accommodate some forms of non expected utility

monetary and fiscal policy interactions in a new keynesian model with capital accumulation and non ricardian consumers the paper examines simple monetary and fiscal policy rules consistent with determinate equilibrium dynamics in the absence of ricardian equivalence under this assumption government debt turns into a relevant state variable which needs to be accounted for in the analysis of equilibrium dynamics the key analytical finding is that without explicit reference to the level of government debt it is not possible to infer how strongly the monetary and fiscal instruments should be used to ensure determinate equilibrium dynamics specifically we identify bifurcations associated with threshold values of steady state debt leading to qualitative changes in the local determinacy requirements

growth with endogenous migration hump and the multiple dynamically interacting effects of aid in poor developing countries we show empirically that aid given to poor developing countries enhances growth and reduces emigration once several dynamically interacting effects of aid are taken into account in a system of equations we estimate equations for net immigration flows as a share of the labour force and gdp per capita growth and also for all their regressors including remittances and official development aid we use dynamic panel data methods for a sample of poor countries with gdp per capita below 1200 2000 for which aid is about 9 5 of gdp the partial effects in these regressions are as follows remittances enhance net immigration savings public expenditure on education and growth but reduce tax revenues all as a share of gdp net immigration enhances labour force growth and the savings ratio official development aid decreases the savings ratio and the per capita gdp growth rate but it increases investment public expenditure on education and literacy and also labour force growth then we integrate all equations to a dynamic system and run a simulation the result is an endogenous migration hump with several peaks in a counterfactual simulation we double aid with the result that for more than a hundred years migration is reduced and the gdp per capita is enhanced because the positive effects of aid on investment and education dominate the negative direct effects of aid on growth and the unfavourable effects on savings tax revenues and labour force growth

why do the young and educated in ldcs concentrate in large cities evidence from migration data do the young and educated in ldcs have a greater preference to locate in big cities if so this may help to explain how cities spatially concentrate the educated and young and why the rising share of these workers in many ldcs may contribute to city growth this paper explores migration flows into and out of egypt s three largest cities we study whether the higher shares of such workers in cities arise because these workers perceive relatively greater benefits from living in cities given relative urban rural wage rates or because the relative demand for these workers rises with city size

emigration to south africa s mines this paper presents a simultaneous econometric model of both the determinants of international migration to the south african mines and of some of the economic consequences for each of the labor supplying countries not only are the short run effects of labor withdrawal on traditional crop cultivation and the domestic wage labor markets considered but also the long term effects of savings from mine earnings invested in crops and cattle in the home countries the experiences of botswana lesotho malawi mozambique and the south african homelands are compared it is shown that emigration to the south african mines has reduced crop production in the subsistence sectors of botswana lesotho malawi and the south african homelands in the short run but the results also suggest that earnings of migrants have enhanced both crop productivity and cattle accumulation in the longer run except in lesotho excerpt

migration theories and evidence an assessment abstract this paper presents a critical survey of theories of migration their welfare and policy implications and their empirical relevance we also develop some extensions to the theory beginning with the harris and todaro ht model in particular the ht model is extended to examine risk averse behaviour within families where the migration of members of families serves to diversify risk the welfare implications of the individual migration decision and government intervention in the form of employment subsidies are examined recent evidence on international migration is presented it is shown that migration does not flow automatically in response to wage differentials characteristics of migrants and the process of self selection are found to be important determinants of the rate of migration

remittances and development in latin america flows of workers remittances have become a major source of external finance for developing countries and are particularly important in latin america and the caribbean where they are estimated to have reached 40 billion in 2004 not surprisingly academics policymakers and development practitioners in general have been devoting increasing attention to the potential development impact that these flows may have on receiving countries this paper contributes to this debate along four dimensions first it reviews the evolution of remittances flows to latin america using balance of payments data and compares these statistics with estimates of remittances income based on household surveys second the paper describes the varying profile of remittances recipients in ten latin american countries third the paper reviews the few macro and microeconomic studies that have estimated the impact of remittances on poverty and inequality finally the paper expands some of the existing works to investigate the extent to which that impact is different in latin america and varies across countries in the region

environmental taxation employment and public spending in developing countries this paper investigates the consequences of environmental tax reforms for unemployment and welfare in the case of developing countries with a large informal sector rural urban migration and three different assumptions about public spending 1 as part of a revenue neutral policy 2 fixed and 3 varying endogenously under the indexation of unemployment benefits and informal sector income that give rise to a double dividend a lower level of public spending is associated with a smaller negative impact on the after tax income of households and a higher increase in employment these policies however still lead to a reduction in social welfare even more so in the case of endogenous public spending although it is associated with a higher increase in employment and a smaller reduction in private sector incomes the model implies that complementary policy in terms of lower public spending is unlikely to be socially acceptable and does not support the case for a green tax reforms in developing countries

hit and they will run the impact of terrorism on migration abstract we analyze the influence of terrorism on migration for 152 countries during 1976 2000 we find robust evidence that terrorism is among the push factors of skilled migration whereas it is not robustly associated with average migration

determinants of intraregional migration in sub saharan africa 1980 2000 despite great accomplishments in the migration literature the determinants of south south migration remain poorly understood in an attempt to fill this gap this paper formulates and tests an empirical model for intraregional migration in sub saharan africa within an extended human capital framework taking into account spatial interaction using bilateral panel data between 1980 and 2000 we find that intraregional migration on the subcontinent is predominantly driven by economic opportunities and sociopolitics in the host country facilitated by geographical proximity the role played by network effects and environmental conditions is also apparent finally origin and destination spatial dependence should definitely not be ignored

the general equilibrium effects of fiscal policy estimates for the euro area abstract this paper describes a dynamic stochastic general equilibrium model featuring a fraction of non ricardian agents in order to estimate the effects of fiscal policy in the euro area the model takes into account distortionary taxation on labor and capital income and on consumption while expenditures are broken down into purchases of goods and services compensation of public employees and transfers to households a newly computed quarterly data set of fiscal variables is used our results point to the prevalence of mild keynesian effects of public expenditures in particular although innovations in fiscal policy variables tend to be rather persistent government purchases of goods and services and compensations for public employees have small and short lived expansionary effects on private consumption while innovations in transfers to households show a slightly more sizeable and lasting effect the effects are more significant on the revenue side decreases in labor income and consumption tax rates have sizeable effects on consumption and output while a reduction in capital income tax favors investment and output in the medium run finally our estimates suggest that fiscal policy variables contribute little to the cyclical variability of the main macro variables

on the interpretation of the nash bargaining solution and its extension to non expected utility preferences the paper reexamines the foundations of the axiomatic nash bargaining theory more specifically it questions the interpretation of the nash bargaining solution and extends it to a family of non expected utility preferences a bargaining problem is presented as x d 2 where x is a set of feasible agreements described in physical terms d is the disagreement event and 1 and 2 are preferences defined on the space of lotteries in which the prizes are the elements in x and d the ordinal nash bargaining solution is defined as an agreement y satisfying for all p e 0 1 and for all x e x if px 1 y then py 2 x and if px 2 y then py x where px is the lottery which gives x with probability p and d with probability 1 p revisions of the pareto symmetry and iia axioms characterize the ordinal nash bargaining solution in the expected utility case this definition is equivalent to that of the nash bargaining solution however this definition is to be preferred since it allows a statement of the nash bargaining solution in everyday language and makes possible its natural extension to a wider set of preferences it also reveals the logic behind some of the more interesting results of the nash bargaining solution such as the comparative statics of risk aversion and the connection between the nash bargaining solution and strategic models

drought transfer entitlements and income distribution the botswana experience abstract using 1974 75 and 1985 86 income distribution survey data with the latter supplemented by drought relief data this paper presents an analysis of intertemporal rural household income distribution in botswana despite the fact that the 1974 75 survey was conducted during one of the best agricultural production periods on record and the 1985 86 survey was conducted in the midst of one of the worst after the rural income economy had been weakened by a severe and prolonged drought botswana s rural income inequality did not appear to have increased significantly there was no marked reduction in rural household real incomes the explanation for this outcome is found to lie in the income maintenance strategy pursued by rural households with strong support from transfer entitlement guarantees from private and public sources supplementing rural household incomes

climate instability urbanisation and international migration abstractthis paper focuses on climate induced migration we construct a simple theoretical model where in a first step climate shocks accelerate the transition from the traditional to the modern sector leading rural workers to move to urban centres within national borders while in a second step downward pressures on wages due to the greater labour supply in cities push people to engage in international migration to test this hypothesis we exploit a rich panel dataset displaying a representative picture of bilateral migration flows and climatic data across 222 countries for the period 1960 2000 findings suggest that in the next few years the climate induced growth rate of migrant stocks might be in a range between 8 6 per cent and 12 8 per cent especially from developing countries where the level of rural employment is more likely to be affected by climatic shocks

bilateral free trade agreements and customs unions the impact of the eu republic of south africa free trade agreement on botswana the eu has indicated that after 2008 its trade relationships with developing countries will be dominated by the development of preferential trade agreements although not a consequence of the cotonou agreement the free trade agreement between the eu and the republic of south africa eu rsa fta is clearly one of the first fruits of this approach to trade relationships however there is no evidence that the design of the eu rsa fta incorporated a comprehensive general equilibrium evaluation of the agreement for either the signatories or the other southern african nations the analyses reported here indicate that while the eu rsa fta may substantially benefit the signatories there are appreciable negative impacts for other states especially the rsa s immediate neighbours moreover the reluctance of the eu to fully liberalise trade in food and agriculture commodities results in a major reduction in the benefits for the rsa without ameliorating substantively the adverse implications for other nations

a cardinal characterization of the rubinstein safra thomson axiomatic bargaining theory in a recent paper rubinstein safra and thomson rst have provided an interesting re examination of the widely applied nash solution for a two person bargaining problem they recast the usual nash bargaining problem into a more natural setting of feasible alternatives with a disagreement outcome the two players are then described by their risk preferences defined on the set of lotteries over the alternatives and the disagreement outcome this enables them to define an ordinal nash solution in terms of the agents risk preferences essentially their ordinal solution is an outcome that is immune against possible objections freeing the definition of the nash solution from utility naturally led rst to extending its scope to non expected utility neu preferences we contend however that the family of neu preferences considered by rst is unduly restrictive the assumptions imposed on the risk preferences by rst essentially exclude any members of the rank dependent expected utility rdeu and betweenness families that can accommodate the very choice paradoxes that stimulated the development of neu theory as these are two of the most extensively analyzed and widely applied neu models in the literature this seems to cast doubt on how broad an extension to neu preferences the rst approach affords we demonstrate however that rst s analysis can be modified so that their conclusion is valid in a wider class of preferences that can include examples of rdeu preferences this class consists of preferences that admit what we term a disagreement linear representation

sticky price and limited participation models of money a comparison abstract we provide new evidence that models of the monetary transmission mechanism should be consistent with at least the following facts after a contractionary monetary policy shock the aggregate price level responds very little aggregate output falls interest rates initially rise real wages decline by a modest amount and profits fall we compare the ability of sticky price and limited participation models with frictionless labor markets to account for these facts the key failing of the sticky price model lies in its counterfactual implications for profits the limited participation model can account for all the above facts but only if one is willing to assume a high labor supply elasticity 2 percent and a high markup 40 percent the shortcomings of both models reflect the absence of labor market frictions such as wage contracts or factor hoarding which dampen movements in the marginal cost of production after a monetary policy shock 1997 elsevier science b v

inflation targeting should it be modeled as an instrument rule or a targeting rule abstract the paper discusses how current inflation targeting should be modeled and argues that it is better represented as a commitment to a targeting rule a rule specifying operational objectives for monetary policy or a condition for the target variables than as a commitment to a simple instrument rule like a taylor rule

tax reform and labour market performance in the euro area a simulation based analysis using the new area wide model in this paper we employ a calibrated two country version of the new area wide model nawm developed at the european central bank to examine the potential benefits and spillovers of reducing labour market distortions caused by euro area tax structures our analysis shows that lowering tax distortions to levels prevailing in the united states would result in an increase in hours worked and output by more than 10 at the same time tax reductions would have positive spillovers to the euro area s trade partners bolstering the case for tax reforms from a global perspective finally we illustrate that in the presence of heterogeneous households distributional effects may be of importance when gauging the impact of tax reforms

the savers spenders theory of fiscal policy the macroeconomic analysis of fiscal policy is usually based on one of two canonical models the barro ramsey model of infinitely lived families or the diamond samuelson model of overlapping generations this paper argues that neither model is satisfactory and suggests an alternative in the proposed model some consumers plan ahead for themselves and their descendants while others live paycheck to paycheck this model is easier to reconcile with the essential facts about consumer behavior and wealth accumulation and it yields some new and surprising conclusions about fiscal policy

the effects of government spending shocks on consumption under optimal stabilization abstract economic theory has yet to come up with a general guidance regarding the dynamic effects and welfare implications of shocks to public spending with the aim to provide a theoretical benchmark we analyse if a rise in private consumption following an exogenous rise in government spending is a feature of the economy under optimal stabilization in a standard new keynesian setting augmented for the presence of liquidity constrained agents and non separable preferences our results provide little evidence in support of a crowding in effect under timelessly optimal policy

risk aversion in the theory of expected utility with rank dependent probabilities expected utility with rank dependent probability theory is a model of decision making under risk where the preference relations on the set of probability distributions is represented by the mathematical expectation of a utility function with respect to a transformation of the probability distributions on the set of outcomes this paper defines based on g teaux differentiability measures of risk aversion for such preferences which characterize the relation more risk averse and applies these measures to the analysis of unconditional and conditional portfolio choice problems

migration amongst the batswana the present study undertakes analysis of the effects of employment probabilities and wage alternatives on migration decisions in the context of botswana adopting micro level data both to estimate a multinomial migration function and to develop prediction equations for wages and likelihood of employment data are from the 1978 1979 national migration survey the factors that influence rural batswana adults to remain at home migrate to town on a short or long term basis move to another rural area or emigrate to south africa are examined consideration is given to the effects of employment alternatives on the rate of internal migration and the selectivity of movements with respect to personal household and locational factors excerpt

rural urban migration in economic development abstract this paper provides a review of the theoretical literature on rural urban migration in contemporary ldcs the paper begins with a brief discussion of the lewis model before going on to discuss the todaro and the harris todaro models and the large literature which these models have spawned the question of job search in the context of migration and the role of family members in migration decisions are considered next the paper then takes a closer look at the informal sector and also sets out alternative migration functions to the ones usually employed in the literature the paper concludes with a brief note on some of the important implications arising from our study

explaining african economic performance africa has had slow growth and a massive exodus of capital in many respects it has been the most capital hostile region we review and interpret the aggregate level and microeconomic literatures to identify the key explanations for this performance there is a reasonable correspondence of the two sets of evidence pointing to four factors as being important these are a lack of openness to international trade a high risk environment a low level of social capital and poor infrastructure these problems are to a substantial extent attributable to government behaviour and the paper includes a review of the political economy literature which addresses that behaviour

limited asset markets participation monetary policy and inverted aggregate demand logic abstract this paper incorporates limited asset markets participation in dynamic general equilibrium and develops a simple analytical framework for monetary policy analysis aggregate dynamics and stability properties of an otherwise standard business cycle model depend nonlinearly on the degree of asset market participation while moderate participation rates strengthen the role of monetary policy low enough participation causes an inversion of results dictated by conventional wisdom the slope of the is curve changes sign the taylor principle is inverted optimal welfare maximizing discretionary monetary policy requires a passive policy rule and the effects and propagation of shocks are changed however a targeting rule implementing optimal policy under commitment delivers equilibrium determinacy regardless of the degree of asset market participation our results may justify fed s behavior during the great inflation period

why has africa grown slowly we distinguish between policy and destiny explanations of africa s slow growth during the past three decades policies were poor high export taxation and inefficient public service delivery and destiny was adverse landlocked tropical locations and terms of trade deterioration during the 1990s africa s economic policies improved although with considerable variation both between countries and between policies trade and exchange rate policies improved much more than service delivery thus the differing explanations of past slow growth imply different predictions for growth in the coming decade we argue that poor public economic services are likely to be the binding constraint

seeking asylum in europe seeking asylum in europe over the last three decades the annual number of applications for asylum in the countries of the european union has increased from about 15 000 to more than 300 000 this has sparked a political backlash a revolution in policy a lively academic debate but very little economic analysis although the causes of asylum flows and the effects of policy are much discussed they have rarely been the subject of quantitative analysis this article examines the evolution of asylum flows and asylum policy across the eu since the early 1980s it investigates the effects of war and conflict economic incentives and asylum policies on the total numbers and on the proportions going to the different countries of the eu special attention is given to the growth of policy restrictiveness across the eu and to the harmonization of asylum policies contrary to some views policy has worked to stem the flows but it has been overwhelmed by other forces timothy j hatton

axiomatic bargaining theory on economic environments abstract axiomatic bargaining theory is reexamined by focusing upon the economic exhange environment instead of the traditional utility possibility set it is argued that the axioms of the traditional theory impose stronger restrictions than can be supported by their motivating economic intuitions weaker alternative axioms making explicit use of economic information are used to characterize the standard bargaining solutions a key idea is to impose consistency of the solution with respect to changes in the dimension of the commodity space even these weaker economic axioms however may be unrealistic restrictions to impose on the bargaining solution in the context of many economic bargaining problems

migration unemployment and development a dynamic two sector analysis abstract a time minimizing problem of attaining a full employment state is solved in a dual economy model with harris todaro migration mechanism and with a positive level of urban unemployment in the starting period it appears that the optimum solution lies in the specialization of investment in the urban sector at least in the initial stage of development if the per capita capital stock in the urban sector is very small in the starting period

appeals immune bargaining solution with variable alternative sets a bargaining solution based on the rubinstein safra thomson ordinal nash outcome is investigated in the peters wakker revealed group preferences framework assuming non expected utility preferences necessary and sufficient conditions are stated on preference pairs in order for the solution to be well defined and axiomatized uniquely

what is wrong with taylor rules using judgment in monetary policy through targeting rules it is argued that inflation targeting is best understood as a commitment to a targeting rule rather than an instrument rule e ither ageneral targeting rule explicit objectives for monetary policy or a specific targeting rule a criterion for the forecasts of the target variables to be fulfilled essentially the equality of the marginal rates of transformation and substitution between the target variables targeting rules allow the use of judgment and extramodel information are more robust and easier to verify than optimal instrument rules and they can nevertheless bring the economy close to the socially optimal equilibrium

the value and allocation of time in rural botswana abstract time use data indicate that there is substantial surplus labor in rural areas of botswana with the incidence of underutilization varying by age sex and asset position time allocations are influenced by economic incentives i e income and productivity effects the more productive capital the household has the more productive work its members perform particularly its children the positive productivity effect of capital on economic work somewhat outweighs its negative income effect time allocations also are constrained by a culturally determined division of labor by age and sex which however shows some flexibility at the margin

optimal fiscal and monetary policy under sticky prices this paper studies optimal fiscal and monetary policy under sticky product prices the theoretical framework is a stochastic production economy without capital the government finances an exogenous stream of purchases by levying distortionary income taxes printing money and issuing one period nominally risk free bonds the main findings of the paper are first for a miniscule degree of price stickiness i e many times below available empirical estimates the optimal volatility of inflation is near zero this result stands in stark contrast with the high volatility of inflation implied by the ramsey allocation when prices are flexible the finding is in line with a recent body of work on optimal monetary policy under nominal rigidities that ignores the role of optimal fiscal policy second even small deviations from full price flexibility induce near random walk behavior in government debt and tax rates third sluggish price adjustment raises the average nominal interest rate above the one called for by the friedman rule finally an interest rate feedback rule whereby the nominal interest rate depends on inflation and output fits well the data emanating from the ramsey economy however the fitted rule is not of the taylor type for the implied inflation coefficient is less than one and close to zero and the output coefficient is negative jel classification e52 e61 e63

commodity prices and growth in africa a frican economies export primary commodities and most export little else policymakers as well as economists and historians of african economic development have seen these exports as both a hope and a curse the following parable tells the story once upon a time a servant of the ruler discovered a miraculous plant which grew readily in that country and whose seeds could be woven into fine cloth so desirable was this fabric that it became prized all over the world and fetched a high price after two score years the plant accounted for most of the country s trade with the world the ruler ordered the peasants to grow the plant paid them only a fraction of its price and he and his nobles became fabulously wealthy because the ruler wished to be remembered as a great ruler and as the father of his country he used his wealth to build a great army and brought machines from foreign countries to make the fine goods that previously could only be obtained from foreign merchants but the machines often broke down and the goods that they made were of poor quality and after the ruler died they were left to rust under the ruler s successor there was a war in a foreign land where the plant also grew so that there was a great shortage and its price increased threefold in only three seasons the new ruler spent his newfound riches on fantastic extravagance while immense sums were expended on public works after the manner of the east and on productive works carried out in the wrong way or too soon not even the threefold increase in prices could support these expenditures and the country soon found itself deeply in debt when the war ended and the price fell the country could no longer pay the interest on its debt or borrow more money even after it had sold its only useful public work to a foreign power so that power sent a mission to the country the publication of whose report from which the above

an interpretation of the effects of age on migration nordic migrants choice of settlement in sweden a model of the relationship between age and migration is developed and applied to data concerning migrants from other scandinavian countries who settled in sweden between 1968 and 1985 the author shows how changes in swedens domestic economic conditions and distance determine the probability for settlement in any of its 24 provinces for migrants of different ages the results show that in the integrated nordic labor market wages at destination do not explain differences in migrants settlement behavior across ages instead they suggest that the major factors to explain the differences are the labor market situation for the different age groups and distance excerpt

optimal fiscal and monetary policy with sticky prices in this paper i consider the role of state contingent inflation as a fiscal shock absorber in an economy with nominal rigidities i study the ramsey equilibrium in a monetary model with distortionary taxation nominal non state contingent debt and sticky prices with sticky prices the ramsey planner must balance the shock absorbing benefits of state contingent inflation against the associated resource misallocation costs for government spending processes resembling post war experience introducing sticky prices generates striking departures in optimal policy from the case with flexible prices for even small degrees of price rigidity optimal policy displays very little volatility in inflation tax rates display greater volatility compared to the model with flexible prices with sticky prices tax rates and real government debt exhibit behavior similar to a random walk for government spending processes resembling periods of intermittent war and peace optimal policy displays extreme inflation volatility even when the degree of price rigidity is large as the variability in government spending increases smoothing tax distortions across states of nature becomes increasingly important and the shock absorber role of inflation is accentuated

demographic and economic pressure on emigration out of africa two of the main forces driving european emigration in the late nineteenth century were real wage gaps between sending and receiving regions and demographic booms in the low wage sending regions our new estimates of net migration for the countries of sub saharan africa show that exactly the same forces driving african across border migration are at work today the results suggest that rapid growth in the cohort of potential young emigrants population pressure on the resource base and slow economic growth are likely to intensify the pressure for migration out of africa and into high wage oecd countries over the next two decades

the great mexican emigration abstract in this paper we examine net emigration from mexico over the period 1960 to 2000 the data are consistent with labor supply shocks having made a substantial contribution to mexican emigration accounting for two fifths of mexican labor flows to the united states over the last two decades of the twentieth century net emigration rates by mexican state birth year cohort display a strong positive correlation with the initial size of the mexican cohort relative to the corresponding u s cohort in states with long histories of emigration the effects of cohort size on emigration are relatively strong consistent with the existence of preexisting networks

defying the law of gravity the political economy of international migration bilateral flows of international migrants exhibit tremendous variance both across destination countries and over time to explain this variance studies of international migration tend to focus on economic determinants such as income differentials or on social conditions such as the presence of coethnics in certain destination countries the authors argue that migration is driven not solely by economic or social determinants rather the political environment across destinations plays a substantively large role in influencing bilateral migration flows they test the importance of the political environment citizenship rights and the prominence of right wing parties using data on migration flows from 178 origin countries into 18 destination countries over the period 1980 2006 they find even after controlling for a variety of economic social policy and international variables that variation in political environments across time and destination plays a key role in observed patterns of international migration

monetary policy expectations and commitment commitment in monetary policy leads to equilibria that are superior to those from optimal discretionary policies a number of interest rate reaction functions and instrument rules have been proposed to implement or approximate commitment policy we assess these rules in terms of whether they lead to a rational expectations equilibrium that is both locally determinate and stable under adaptive learning by private agents a reaction function that appropriately depends explicitly on private sector expectations performs particularly well on both counts

the migration response to increasing temperatures climate change especially the warming trend experienced in recent years by several countries could affect agricultural productivity as a consequence the income of rural populations will change and with it the incentives for people to remain in rural areas using data from 115 countries between 1960 and 2000 we analyze the effect of differential warming trends across countries on the probability of either migrating out of the country or from rural to urban areas we find that higher temperatures in middle income economies increased migration rates to urban areas and to other countries in poor countries higher temperatures reduced the probability of migration to cities and to other countries consistently with the presence of severe liquidity constraints in middle income countries migration represents an important margin of adjustment to global warming potentially contributing to structural change and even increasing income per worker such a mechanism however does not seem to work in poor economies