Scandinavian Working Papers in Economics

Research Papers in Economics,
Stockholm University, Department of Economics

No 2000:10: What We Cannot Learn from the Irish Experience: A fundamental Asymmetry of Asymmetric Shocks

Fredrik Andersson () and Rikard Forslid
Additional contact information
Fredrik Andersson: Department of Economics, Lund University, Postal: Department of Economics, Lund University, P.O. Box 7082, S-220 07 Lund, Sweden
Rikard Forslid: Department of Economics, Lund University, Postal: Department of Economics, Lund University, P.O. Box 7082, S-220 07 Lund, Sweden

Abstract: A simple N-country specific-factor model with imperfectly mobile labour is developed. It is shown that effects of country-specific productivity shocks hitting a small country are fundamentally asymmetric. A positive shock will be accomodated by a moderate wage increase and sizable in-migration, whereas a negative shock will be accomodated by a significant decrease in wages and moderate out-migration. The effects of shocks in a monetary union are discussed, and it is argued that the results are consistent with the recent Irish experience. The welfare effects of small economics fluctuations are also discussed.

Keywords: migration; assymmetric shocks

JEL-codes: E24; F22

14 pages, August 11, 2000

Full text files

wp00_10.pdf PDF-file 

Download statistics

Questions (including download problems) about the papers in this series should be directed to Anne Jensen ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2024-02-05 17:13:48.