Immigration and Secular Stagnation

ISER DP No. 1054, May 2019

34 Pages Posted: 3 Jun 2019 Last revised: 16 Jul 2019

See all articles by Kaz Miyagiwa

Kaz Miyagiwa

Emory University - Department of Economics; Osaka University - Institute of Social and Economic Research (ISER); Florida International University (FIU) - Department of Economics

Yoshiyasu Ono

Osaka University - Institute of Social and Economic Research (ISER)

Date Written: June 4, 2019

Abstract

We examine the effect of immigration on the host country in the dynamic model that can deal with secular unemployment. Immigration has contrasting effects, depending on the economic state of the host country. If there is unemployment, immigration worsens unemployment and decreases consumption by native residents whereas if full employment prevails, immigration has the effect of boosting consumption while keeping full employment. However, an influx of too many immigrants can turn the host country into stagnation. We also find that immigrants’ remittances are harmful to the host country under full employment but beneficial under secular stagnation.

Keywords: Immigration, unemployment, secular stagnation, aggregate demand deficiency, remittances

JEL Classification: F16, F22, F41

Suggested Citation

Miyagiwa, Kaz and Ono, Yoshiyasu, Immigration and Secular Stagnation (June 4, 2019). ISER DP No. 1054, May 2019. Available at SSRN: https://ssrn.com/abstract=3387136 or http://dx.doi.org/10.2139/ssrn.3387136

Kaz Miyagiwa

Emory University - Department of Economics ( email )

1602 Fishburne Drive
Atlanta, GA 30322
United States

Osaka University - Institute of Social and Economic Research (ISER) ( email )

6-1 Mihogaoka
Ibaraki Osaka 567-0047
Japan

Florida International University (FIU) - Department of Economics ( email )

Miami, FL 33199
United States

Yoshiyasu Ono (Contact Author)

Osaka University - Institute of Social and Economic Research (ISER) ( email )

6-1 Mihogaoka
Ibaraki, Osaka 567-0047
Japan

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