Quantifying the Benefits of Labour Mobility in a Currency Union

• 成果类型: Article; Early Access
• 署名作者: House, Christopher L.; Proebsting, Christian; Tesar, Linda L.
• 署名单位: University of Michigan System; University of Michigan; National Bureau of Economic Research; KU Leuven
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdaf055
• 发表日期: 2025
• 关键词: small open-economy; monetary-policy; indivisible labor; Market dynamics; fiscal-policy; UNITED-STATES; migration; immigration; TRADE; wage

摘要

Unemployment differentials are greater between countries in the euro area than between U.S. states. In both regions, net migration responds to unemployment differentials, though the response is smaller in the euro area compared to the U.S. We use a multi-country DSGE model with cross-border migration to quantify Mundell's hypothesis that labour mobility could substitute for independent monetary policy in a currency union. While not as effective as independent monetary policy, increased labour mobility reduces business cycle fluctuations for most countries in the euro area. However, Mundell's conjecture does not hold uniformly. For countries that primarily face demand shocks, labour mobility stabilizes inflation and unemployment and improves welfare. If supply shocks are dominant however, labour mobility increases the cost of being in a currency union by magnifying inflation volatility.