Labor mobility in a monetary union

• 成果类型: Article
• 署名作者: Hauser, Daniela; Seneca, Martin
• 署名单位: Bank of England; Bank of Canada
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2022.103600
• 发表日期: 2022
• 关键词: Labor mobility; monetary policy; monetary union; business cycles

摘要

Internal migration flows are endogenously driven by relative labor market performance in a New Keynesian DSGE model of a monetary union calibrated to U.S. data. When labor markets are competitive, a strict focus on stabilizing unionwide inflation remains close to optimal. With search and matching frictions in regional labor markets, labor mobility across state borders introduces additional trade-offs for optimal monetary policy since workers do not internalize the full effects of their individual migration decisions. But when monetary policy is suboptimal, a mobile labor force helps to close inefficiency gaps in regional labor markets following region specific shocks. Putting some weight on labor market outcomes in a simple instrument rule enhances welfare more when labor is mobile.(c) 2022 Published by Elsevier B.V.