return migration uncertainty and precautionary savings this paper presents a life cycle model where migrants determine re migration and consumption simultaneously in a stochastic environment whether precautionary savings of migrants are above or below those of natives is ambiguous in general the sign depends on the risk in host and home country labor markets and on the correlation of labor market shocks furthermore the effect of an uncertain environment on migration and re migration plans cannot be unambiguously signed for the general case it depends on the size of the wage differential as well as the relative risk the migrant exhibits in the two labor markets

the effect of annuity insurance on savings and inequality this paper examines the amount of precautionary savings and wealth inequality arising from life span uncertainty by comparing saving behavior under perfect insurance arrangements with that arising under imperfect arrangements namely when longevity risk can be pooled only with members of one s own family the central findings of the paper are that 1 perfecting insurance arrangements can sharply lower savings in both intergenerationally altruistic and life cycle economies and that 2 in altruistic economies perfecting annuity insurance can greatly influence inequality indeed in the long run in our model switching from imperfect family insurance to perfect insurance can mean the difference between absolute inequality and absolute equality

temporary foreign workers and firms theory and canadian evidence abstract temporary foreign worker tfw programs have grown considerably in size when uncapped we develop a simple efficiency wage model to explain this phenomenon and examine the empirical evidence for it we also use the model to evaluate the implications of tfw programs for domestic workers in our framework firms that have been unable to find domestic workers may hire tfws at the wage previously advertised to domestic workers due to the lower outside option for tfws than domestic workers tfws will exert more effort for the same wage firms would thus prefer to hire otherwise identical tfws rather than domestic workers our model identifies an unintended consequence of a tfw program since the repercussions of a failed domestic job search are less severe if a tfw may be hired instead firms have an incentive to lower their wage offers made to domestic workers using canadian data we find that relative to domestic workers tfws work longer hours have lower rates of absenteeism and are less likely to be laid off consistent with higher effort in our model moreover for tfws from home countries with a relatively high outside option effort is lower than for tfws from other countries resume travailleurs etrangers temporaires et entreprises theorie et exemple canadien en l absence de plafonnement les programmes de travailleurs etrangers temporaires ptet se sont considerablement developpes afin d expliquer ce phenomene et d en examiner les preuves empiriques nous avons developpe un modele simple de salaire d efficience nous avons egalement utilise ce modele pour evaluer l incidence des ptet sur les travailleurs domestiques dans notre cadre d etude les entreprises peinant a trouver une main d uvre locale peuvent embaucher des travailleurs etrangers temporaires au salaire prealablement propose aux travailleurs domestiques compte tenu d options exterieures plus faibles les travailleurs etrangers temporaires deploieront davantage d efforts pour le meme salaire les entreprises prefereront donc embaucher des travailleurs etrangers par ailleurs identiques plutot que des travailleurs domestiques notre modele identifie une consequence inattendue aux ptet etant donne que les consequences d une recherche d employes domestiques infructueuse sont attenuees par l embauche de travailleurs etrangers temporaires les entreprises sont incitees a diminuer les offres salariales proposees aux travailleurs locaux en exploitant les donnees propres au canada nous avons decouvert que les travailleurs etrangers temporaires travaillaient plus d heures avaient des taux d absenteisme inferieurs et etaient moins susceptibles de se faire congedier que les travailleurs domestiques conformement au concept d effort accru developpe dans notre modele en outre pour les travailleurs etrangers temporaires originaires de pays a options exterieures relativement elevees l effort sera moindre que pour ceux provenant d autres pays

migrants in a guest worker system a utility maximizing approach this paper examines the behavior of utility maximizing migrants in a system of guest worker migration their pattern of leisure and commodity consumption at home and abroad is analysed and related

return migration the european experience labour immigration contributed strongly to europe s post war economic development in contrast to migration to north america or australia these movements of labour were always seen as temporary by sending and receiving countries and at least initially also by most migrants although many migrants stayed more permanently return migration is a highly relevant feature in practice its significant role and the underlying behavioural mechanisms are not well understood however it is therefore not too surprising that most policy measures taken in the 1970s and 1980s to encourage return migration failed the paper takes the view that much can be learned from recent european history temporary immigration schemes may be helpful to moderate illegal migration and to foster east west economic relationships given the tight policies in the european union short term migration seems to be the only channel to open the door slightly the paper reviews the european history of return migration and the policy regimes in important european labour migration receiving countries it also provides new empirical evidence on the determinants of return behaviour and successful return return propensities of migrants increase with the age at entry but decrease with the number of years of residence conditional on having decided to return however the remaining years in the country decrease with years of residence and keeping years of residence constant with entry age return incentives may cause dissatisfaction and reintegration problems in the home country the results support the view that economic benefits are the larger the earlier it is clear whether migration is temporary or permanent

the effects of immigration in a distorted two sector economy this paper examines the income employment and distributional impact of immigration on a recipient economy facing an administered wage distortion it is found that immigration increases the unemployment rate of the native population and shifts income distribution against labor and in favor of the nonlabor input its effect on the total income of the non immigrants is however ambiguous and depends on the relative importance of the increase in unemployment versus the net increase in the rent received by the owners of the non labor input

can appreciation be expansionary evidence from the euro area summarywe identify exogenous effects of shifts in effective exchange rates for euro area ea countries between 1999 and 2016 the identification strategy is based on an external instrument built on the assumption that movements in the euro nominal effective exchange rate are largely exogenous for individual ea countries once we control for ea aggregates we find that a real appreciation creates a trade off between expenditure switching contractionary and terms of trade expansionary effects with the latter prevailing in most countries we also find some heterogeneity in the way movements in the euro exchange rate are transmitted within the ea in particular between core and peripheral countries although differences are mostly not statistically significant

a dynamic migration model with uncertainty we study a dynamic version of the harris todaro migration model where a finite population of infinitely lived bayesian agents choose consumption and migration decision rules as a function of their histories the agents do not know the production functions in the two sectors and learn about them through wage draws that they receive from the stochastic production functions the government knows the true production functions but is uninformed about the agents beliefs and the actual wage draws they observe the government maximizes its welfare function using wage subsidies in the two sectors and a migration tax we solve the agents dynamic programming problem and then use the solution to solve the government s dynamic programming problem we study the effects of government policies on the population distribution and illustrate the model by numerically solving a particular parametric example

immigrant decisions concerning duration of stay and migratory frequency abstract the temporary and repetitive character of contemporary labor migration is explained by assuming that immigrants have a preference for location a life cycle model of immigrant behavior is developed to determine net lifetime income total time allocated to home country and foreign country residence and the number of migratory trips because of income effects home wages and foreign wages are not symmetric in their effect on the location of work effort it is also shown that changes in travelling costs have predictable consequences for the number of border crossings but not for the total time spent in the foreign labor market

nominal wage flexibility wage indexation and monetary union membership in a monetary union implies stronger incentives for nominal wage flexibility in the form of wage indexation and shorter contract length than non membership this counteracts the stabilisation policy cost of giving up monetary independence but more wage flexibility is only an imperfect substitute for an individual monetary policy it is possible that an increase in wage flexibility is welfare decreasing because of the accompanying rise in price variability the interaction between wage setting and central bank behaviour may result in either multiple equilibria or a unique full indexation equilibrium

a comparative analysis of the nativity wealth gap this paper investigates the source of the gap in the relative wealth posi tion of immigrant households residing in australia germany and the united states our results indicate that in germany and the united states wealth difierentials are largely the result of disparity in the educational attainment and demographic composition of the native and immigrant populations while income difierentials are relatively unimportant in understanding the nativity wealth gap in contrast the relatively small wealth gap between australian and foreign born households exists because immigrants to australia do not translate their relative educational and demographic advantage into a wealth advantage on balance our results point to substantial cross national disparity in the economic well being of immigrant and native families which is largely consistent with domestic labor markets and the selection policies used to shape the nature of the immigration ow

nash bargained household decisions reply pierre andre chiappori s 1988 claim that the nash bargaining model is of weak empirical relevance and neither convenient nor really restrictive is incorrect nash bargained household behavior implies a rich set of empirical implications extending well beyond the pareto efficiency of intrafamily distributions by systematically accounting for the impact of opportunities outside the family on resource distribution within the family nash bargained demand theory considerably expands the scope of neoclassical demand theory such expansion can elucidate issues ranging from the impact of alimony and child support laws in developed societies to the intrafamily distribution of nutrition in less developed countries copyright 1990 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

real exchange rate monetary policy and the u s economy evidence from a favar model this paper examines the effects of exchange rate depreciation to the u s economy in a factor augmented vector autoregression model using monthly data of 148 variables for the post bretton woods period of 1973 2017 exchange rate shock is identified to reflect exogenous disturbances to the foreign exchange market and movements in exchange rate that are not accounted for by changes in the u s monetary policy we find that depreciation is expansionary and inflationary to the broad u s economy the current account improves over time conforming to the j curve theory and monetary policy is leaning against the wind jel e3 e5 f31 f32 f41

the dynamic effects of aggregate demand and supply disturbances we interpret fluctuations in gnp and unemployment as due to two types of disturbances disturbances that have a permanent effect on output and disturbances that do not we interpret the first as supply disturbances the second as demand disturbances demand disturbances have a hump shaped mirror image effect on output and unemployment the effect of supply disturbances on output increases steadily over time peaking after two years and reaching a plateau after five years

wage bargaining inventories and union legislation this paper analyses a strategic bargaining game where the firm may or may not be able to sell out of its inventory of finished goods during a strike firms and the union are both risk neutral and have the same discount rate it is shown that the wage equilibrium corresponds to the axiomatic nash bargaining solution where the threatpoints are the agents payoffs should bargaining continue indefinitely we use the 1980 and 1982 employment acts to test this theory interpreting that legislation change as changing the firm s threatpoint but not its bargaining power this allows us to identify the value of the firm s threatpoint post 1982 formal tests support the theory also consistent with the theory it is found that union wages decrease with inventories after 1982 but not before and that the union wage gap is smaller after 1982 wage bargaining as described in the strategic bargaining literature is a peaceful affair if there is no agreement workers simply withdraw their labour for one period and there is a consequent one period loss of production for the firm but strikes tend to generate a lot of conflict in the u k in the 1970s striking unions would form picket lines across the factory gates their aim was not only to prevent strikebreakers going to work but also to stop lorries delivering goods conversely firms often with the help of the police would try to get the lorries across those lines the employment acts of 1980 and 1982 stopped this struggle stopping lorries crossing picket lines had always been illegal but this new legislation gave firms power to have picket lines immediately lifted should striking workers act illegally the courts would immediately sequester the union s assets if its members refused to comply with the law using the strategic bargaining approach this paper considers the equilibrium effect of this change in legislation on union wage formation using wage and inventory data from a panel of firms across this time period this paper also formally tests that theory there have been two main approaches to bargaining theory the strategic bargaining

exchange rate behaviour are fundamentals important one of the most controversial issues in the international economics literature concerns the role of economic fundamentals in explaining exchange rate behaviour we interpret this controversy as having three different aspects the first concerns the relationship between exchange rates and fundamentals in the long run the second the usefulness of fundamentals in producing out of sample forecasts which dominate a random walk and the third controversy concerns the relative importance of shocks to real and nominal fundamentals in explaining real exchange rate variability this as we shall see is related to the first controversies one and two therefore may be thought of as relating to the first moment of exchange rate behaviour while the third is associated with the second moment the first controversy may be motivated by referring to fig 1 which portrays the logarithm of the real and nominal exchange rates of the mark dollar

temporary and permanent migration with and without an immobile factor abstract this paper develops two two country overlapping generations models one with and one without an immobile factor to study temporary and permanent migration temporary migration is shown to be equivalent to international lending and borrowing one strong result found in the literature that if natives of each country are homogeneous permanent migration leads to the migration of the entire population of the impatient country in the long run is overturned welfare effects of migration are analyzed

temporary emigration and welfare the case of low skilled labor this article studies the implications of temporary emigration for the welfare of a source country the framework is one of general equilibrium where the economy s stocks of both capital and labor are endogenously determined by the saving and migration decisions of optimizing agents simulations of the model suggest that for realistic values of the parameters welfare of nonmigrants of the source country is maximized when the migrants are employed abroad for a period in the range of roughly 8 12 years the ideal duration is found to be an increasing function of the international wage differential migration costs and the degree to which the rights of migrants are protected in the host country

stochastic trends and economic fluctuations are business cycles mainly the result of permanent shocks to productivity this paper uses a long run restriction implied by a large class of real business cycle models identifying permanent productivity shocks as shocks to the common stochastic trend in output consumption and investment to provide new evidence on this question econometric tests indicate that this common stochastic trend cointegration implication is consistent with postwar u s data however in systems with nominal variables the estimates of this common stochastic trend indicate that permanent productivity shocks typically explain less than half of the business cycle variability in output consumption and investment copyright 1991 by american economic association

why are services cheaper in the poor countries in their important work on international comparisons of national incomes and of comparative price structure kravis heston and summers i982 p 8 have noted that services are much cheaper in the relative price structure of a typical poor country than in that of a rich country this phenonomen has been documented now fairly systematically by the data gathered under their guiding hand of the united nations international comparison icp which covers 34 countries table i reproduced from their work i982 and fig i based on rows 3 and ii 13 indeed show this tendencyfor the relationship between relative service prices and real per capita gdp in this kravis heston summers 34 country 6 group sample the tendency is strongly evident except for the intermediate groups iii and iv

how much intraregional exchange rate variability could a currency union remove the case of asean 3 abstract a multilateral currency union removes intraregional exchange rates but not the union rate the pre union intraregional exchange rate variability is thus latent a two step procedure is developed to measure this the measured variables are used to model inflation and intraregional trade growth of individual union members counterfactual simulations of the union impact are carried out using the resulting models application to asean 3 shows that the intraregional variability mainly consists of short run exchange rate shocks that the variability significantly affects inflation and intraregional trade of major asean 3 members and that a union would reduce inflation and promote trade regionwide

a general equilibrium model of guest worker migration the source country perspective abstract this paper examines the problem of guest worker migration from an economy populated by identical utility maximizing individuals with finite working lives the decision to migrate the rate of saving while abroad as well as the length of a migrant s stay in the foreign country are all viewed as part of a solution to an intertemporal optimization problem in addition to studying the microeconomic aspects of temporary migration the paper analyses the determinants of the equilibrium flow of migrants the corresponding domestic wage and the level of welfare enjoyed by a typical worker effects of an emigration tax are also investigated

the laissez faire approach to international labor migration the case of the arab middle east the weaknesses of laissez faire theories and policies on international labor migration are examined by reviewing contemporary labor migration in the middle east estimates of the number of arab migrant workers in the arab region in 1975 are presented and three types of problems that labor migration creates for sending countries are identified 1 uncertainty for both economic and political reasons about the continuation or expansion of the current flows 2 micro effects of remittance spending and labor migration and 3 the selectivity of migration and its impact on certain key sectors it is argued that although individual migrants and employers benefit from laissez faire migration policies the impacts on sending societies as a whole are ambiguous excerpt

the exchange rate a shock absorber or source of shocks a study of four open economies abstract the paper provides svar estimates for the uk canada sweden and denmark making explicit a monetary policy reaction function and taking account of exchange rate targeting practices it examines the role of the exchange rate as shock absorber as opposed to a source of its own and destabilizing shocks we find that in all countries but the uk real shocks are predominantly symmetric relative to the neighbor implying little need for the exchange rate to act as shock absorber the shocks arising in the exchange market appear to have played a more important role in denmark than in the other countries

stability and collective rationality the principle of pairwise comparisons is a well established one in social choice theory the idea of collective rationality that social decisions be made consistently with the maximization of some ordering of the alternatives is the most familiar application of this principle and indeed is a defining property of the social welfare functions of bergson 1938 and samuelson 1947 and of arrow 1951 as is well known the idea of collective rationality involves comparing every social state to every other social state in terms of the welfare assigned by those states to a given group of individuals and declaring a social state to be fair or good if it is good when considering all such pairwise comparisons with other social states alternatively one could imagine a social decision process based on comparing every individual to every other individual in terms of the welfare assigned to those individuals by a given social state and declaring a social state to be good or fair if it is fair when considering all such pairwise comparisons of individuals a social decision process in this spirit has been suggested by harsanyi 1959

conditional ppp and real exchange rate convergence in the euro area abstract while economic theory highlights the usefulness of flexible exchange rates in promoting adjustment in international relative prices flexible exchange rates also can be a source of destabilizing shocks we find that when countries joining the euro currency union abandoned their national exchange rates the adjustment of real exchange rates toward their long run equilibrium surprisingly became faster to investigate we distinguish between differing rates of purchasing power parity ppp convergence conditional on alternative shocks which we refer to as conditional ppp we find that the loss of the exchange rate as an adjustment mechanism after the introduction of the euro was more than compensated by the elimination of the exchange rate as a source of shocks in combination with faster adjustment in national prices these findings support claims that flexible exchange rates are not necessary to promote long run international relative price adjustment

international migration remittances and welfare in a dependent economy abstract this note extends the work of rivera batiz 1982 in an attempt to examine the role of remittances in determining the effects of migration on the welfare of the remaining residents in a small open economy producing both traded and non traded goods it is shown that if the flow of remittances exceeds a certain critical amount the remaining residents benefit from migration even if they do not receive any of the remittances themselves this is in sharp contrast with the results of the rivera batiz model in which the possibility of a gain for the non migrants is ruled out

the west german gastarbeiter system of immigration abstract the paper analyzes the west german immigration system as operated until early 1970s defining the essential features of this system the authors explain the cross sectional industrywise utilization of foreign guestworkers during 1964 65 to 1971 72 they also extend the analysis to explaining the sourcewise by country composition of foreign workers during this period

illegal aliens unemployment and immigration policy abstract this paper develops a simple two country model of illegal immigration in an attempt to examine the interaction among variables such as the stock of migrant labor the unemployment rates of the two economies and the rate of spending by the host country on the enforcement of its immigration restrictions the focus of the analysis is on the dynamics of immigration policy and on its role in determining the nature of the mechanism by which disturbances to the labor market of one country are transmitted to that of the other in the short run and in the long run

some essentials of a workable guest worker program a guest worker program provides an appealing way of addressing labor shortages in an advanced country it requires however that foreign workers are willing to return home when their work permit expires i examine how immigration policies enforcement measures and opportunities available in various markets at home and abroad affect the behavior of program participants welfare of a migrant who obeys the rules of the program is compared with that of workers who choose other options in order to define the conditions under which temporary migration is attractive to potential migrants and at the same time consistent with voluntary return

learning from a piece of pie we investigate the empirical content of the nash solution to two player bargaining games the bargaining environment is described by a set of variables that may affect agents preferences over the agreement sharing the status quo outcome or both the outcomes i e whether an agreement is reached and if so the individual shares and the environment including the size of the pie are known but neither are the agents utilities nor their threat points we consider both a deterministic version of the model in which the econometrician observes the shares as deterministic functions of the variables under consideration and a stochastic one in which because of latent disturbances only the joint distribution of incomes and outcomes is recorded we show that in the most general framework any outcome can be rationalized as a nash solution however even mild exclusion restrictions generate strong implications that can be used to test the nash bargaining assumption stronger conditions further allow to recover the underlying structure of the bargaining and in particular the cardinal representation of individual preferences in the absence of uncertainty an implication of this finding is that empirical works entailing nash bargaining could and should use much more general and robust versions than they usually do copyright 2012 oxford university press

imperfect information specificity of schooling and rate of return migration abstract international migration is a dynamic process having moved into a country of destination a migrant may after a while decide to return to his country of origin the aggregate rate of return migration among a group of migrants is studied imperfect imformation leading to unrealized expectation of the migrants and changes in rates of return to schooling across countries over time are modelled as factors contributing towards return migration schooling is decomposed into schooling acquired before migration and after migration to take account of its specificity to the country in which it is acquired

the economics of the to and fro migrant some welfare theoretical considerations the effects of international to and fro migration on the economic welfare of the migrants and the nonmigrants in the host and home countries are examined a to and fro migrant is defined as a worker who changes residence from origin to destination without any systematic tendency to remain in any of the two permanently the study is based on the theoretical framework developed by krauss the results indicate that to and fro emigration from a source country to a recipient country increases the economic welfare of the migrants and the nonmigrants residing in the host country but it tends to decrease the welfare of the nonmigrants residing in the source country in general the migration also tends to be pareto optimal from a world point of view excerpt

identifying monetary policy in a small open economy under flexible exchange rates abstract previous empirical study on the effects of monetary policy shocks in small open economies has generated puzzling dynamic responses in various macroeconomic variables this paper argues that these puzzles derive from an identification of monetary policy that is inappropriate for such economies to remedy this it is proposed that a structural model be estimated to explicitly account for the features of the small open economy such a model is applied to canada with tightly estimated results overall the dynamic responses to the identified monetary policy shock are consistent with standard theory and highlight the exchange rate as a transmission mechanism

exchange rate stabilization in the erm identifying european monetary policy reactions abstract we develop the structural var models for european countries france denmark and germany during the erm period to examine the monetary policy reactions especially the within erm exchange rate stabilization in addition to analyzing the impulse responses and variance decomposition we present the full monetary reaction function in an interpretable manner without introducing additional assumptions the results suggest some asymmetry in exchange rate stabilization non german exchange rate stabilization is stronger than german exchange rate stabilization but do not support the hypothesis that german monetary policy was independent of the erm

the third round of euro area enlargement are the candidates ready abstract in this paper we study the readiness of bulgaria croatia and romania to adopt the common monetary policy of the ecb in the context of the third round of euro area enlargement following the optimal currency area oca theory literature we focus on the coherence of economic shocks between candidate countries on the one hand and the euro area on the other and analyse the relevance of euro area shocks for key macroeconomic variables in these countries our results based on a novel empirical approach show that the overall importance of those shocks that are relevant for the ecb is fairly similar in candidate countries and the euro area the cost of joining the euro area should therefore not be pronounced at least from the aspect of the adoption of the common counter cyclical monetary policy this conclusion holds for all three candidates despite important differences in their monetary and exchange rate regimes

on the testable implications of collective choice theories we analyze collective choices in game forms from a revealed preference viewpoint we call the joint choice behavior of n agents nash respectively pareto rationalizable if there exist n preferences over the conceivable joint actions such that the joint actions selected from each game form coincide with the nash equilibria respectively the pareto optima of the corresponding game in the two agent case we show that every deterministic joint behavior which is nash rationalizable is also pareto rationalizable the converse is false we further identify general necessary and sufficient conditions for nash rationalizability of an n agent joint choice behavior we also define and characterize partial versions of the nash and pareto rationalizability requirements journal of economic literature classification numbers c72 c92

the determinants of east west german migration some first results determinants of the propensity to migrate are explored using data collected in a survey of east german residents following german reunification in 1991 the author notes that in the period 1989 1992 some 870000 individuals migrated to west germany representing about 5 of the total east german population and 10 of the work force he suggests that recent developments in the literature on the option value of waiting may yield important insights into these determinants excerpt

international trade and labor migration a theory of the relationship between international trade and labor mobility is developed that takes into account five characteristics of such migration including its temporary nature differences between migrant and native labor the acceptance of unpredictable conditions of employment by migrant labor the ready availability of further labor resources and international capital mobility particular attention is paid to the role of international labor migration in helping to insulate native populations from the rigors of industrial fluctuations and in helping to preserve import competing industries that would have succumbed without the availability of cheap imported labor

international migration versus foreign investment in the presence of unemployment abstract this paper extends the standard two factor one good model of international factor movements to include unemployment due to a minimum income guarantee within the capital abundant country from this country s perspective we establish important departures from previous full employment results most notably our analysis shows that 1 free factor mobility is worse than no mobility 2 the optimal degree of labour migration is zero and 3 national welfare can always be maximized by an optimal flow of capital the analysis is then extended to examine 1 illegal migration 2 subsidization of employment and 3 alternative views of unemployment

investment opportunities in the source country and temporary migration this paper examines how attractive investment opportunities available to temporary migrants in their country of origin aect their saving behavior and the optimal duration of stay abroad the model predicts an inverse u shaped relationship between migration duration and the expected rate of return on repatriated savings a higher rate provides an incentive to go back earlier and consume less abroad while it can also trigger emigration aimed at generating the savings required for investment after return at a more general level the paper illustrates how the behavior of temporary migrants re ects the interaction between their preferences and the opportunities available in the labor and capital markets of both countries

are supply shocks important for real exchange rates a fresh view from the frequency domain abstract this paper re examines the role of supply shocks for real exchange rate fluctuations and contributes by exploiting insights from the frequency domain perspective in contrast to the existing literature our empirical findings point towards an important role played by supply productivity shocks in driving us real effective exchange rate fluctuations at low frequencies while real demand shocks matter mostly at high and medium frequencies in addition we propose an approach to structurally decompose the persistence of the real exchange rate and find that supply shocks explain up to half of its persistence

the effect of central bank transparency on exchange rate volatility abstract the increase in central bank transparency has been one of the main developments in central banking in the past two decades this leads to the question of the effect of central bank transparency on the volatility of exchange rates according to theoretical considerations more information could lead to either more precise forecasts or more noise trading this raises the need for an empirical estimation of the relationship the present study shows that the effect of central bank transparency on exchange rate volatility depends on a country s development while there is no effect of central bank transparency in the full sample and for developing countries transparency increases exchange rate fluctuations in developed countries

asset prices exchange rates and the current account this paper analyses the role of asset prices in comparison to other factors in particular exchange rates as a driver of the us trade balance it employs a bayesian structural var model that requires imposing only a minimum of economically meaningful sign restrictions we find that equity market shocks and housing price shocks have been major determinants of the us current account in the past accounting for up to 30 of the movements of the us trade balance at a horizon of 20 quarters by contrast shocks to the real exchange rate have been less relevant explaining about 9 and exerting a more temporary effect on the us trade balance our findings suggest that large exchange rate movements may not necessarily be the key element of an adjustment of today s large current account imbalances and that in particular relative global asset price changes could be a potent source of adjustment

the work effort and the consumption of immigrants as a function of their assimilation positive self selection has been used to explain the superior economic performance of some immigrant groups even if immigrants and natives are identical however the former face different incentives in particular they bear costs not incurred by natives including monetary costs of moving costs of staying in touch with family and obligations to those left behind nonmonetary costs include stress and loss of location specific human capital the focus of this paper is on how these costs influence the decisions of immigrants relative to those of natives particular attention is given to the role of assimilation

estimating the impact of immigrants on the host country social security system when return migration is an endogenous choice in this paper i examine the impact of immigrants on the social security system in germany when return migration is an endogenous choice for this purpose i develop a dynamic stochastic model of joint return migration and saving decisions that accounts for uncertainty in future employment and income and estimate this model using a longitudinal dataset on immigrants from five different source countries i find that immigrants make positive net contributions to both the pension and unemployment insurance systems in germany regardless of their country of origin and age at entry moreover the magnitudes of the net contributions are remarkable for certain groups return migration plays a critical role in generating these positive net contributions in a counterfactual i examine how much exogenous modeling of the return decision which has been the practice of the literature so far changes immigrants net contributions such a restriction causes a serious misestimation of net contributions i also examine the impact of a counterfactual policy experiment in which financial bonuses are provided conditional on return to certain unemployed immigrants such a policy turns out to be ineffective in a number of dimensions