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A fundamental asymmetry of asymmetric shocks

Andersson, Fredrik LU and Forslid, R (2004) In European Economic Review 48(2). p.337-351
Abstract
A simple N-country specific-factor-type model with imperfectly mobile labour is developed. It is shown that the effects of country-specific productivity shocks hitting a small country have fundamentally asymmetric effects: A positive shock will be accommodated by a moderate wage increase and sizeable in-migration, whereas a negative shock will be accommodated by a significant decrease in wages and moderate out-migration. It is argued that the results of the model are consistent with the recent Irish experience. The welfare effects of small economic fluctuations are also discussed. (C) 2002 Elsevier B.V. All rights reserved.
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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
asymmetric shocks, migration
in
European Economic Review
volume
48
issue
2
pages
337 - 351
publisher
Elsevier
external identifiers
  • wos:000220045100005
  • scopus:1542540286
ISSN
1873-572X
DOI
10.1016/S0014-2921(02)00262-3
language
English
LU publication?
yes
id
31e709cd-19ba-416a-85e7-15779375672c (old id 899272)
date added to LUP
2008-01-10 10:45:28
date last changed
2017-01-01 05:07:15
@article{31e709cd-19ba-416a-85e7-15779375672c,
  abstract     = {A simple N-country specific-factor-type model with imperfectly mobile labour is developed. It is shown that the effects of country-specific productivity shocks hitting a small country have fundamentally asymmetric effects: A positive shock will be accommodated by a moderate wage increase and sizeable in-migration, whereas a negative shock will be accommodated by a significant decrease in wages and moderate out-migration. It is argued that the results of the model are consistent with the recent Irish experience. The welfare effects of small economic fluctuations are also discussed. (C) 2002 Elsevier B.V. All rights reserved.},
  author       = {Andersson, Fredrik and Forslid, R},
  issn         = {1873-572X},
  keyword      = {asymmetric shocks,migration},
  language     = {eng},
  number       = {2},
  pages        = {337--351},
  publisher    = {Elsevier},
  series       = {European Economic Review},
  title        = {A fundamental asymmetry of asymmetric shocks},
  url          = {http://dx.doi.org/10.1016/S0014-2921(02)00262-3},
  volume       = {48},
  year         = {2004},
}