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Wataru Johdo
''International worker mobility and the effects of monetary policy shocks''
( 2022, Vol. 42 No.2 )
In this paper, we develop a new open economy macroeconomics model that incorporates international worker mobility and nominal wage rigidities. The driving force for relocation of workers is differences in real wages between home- and foreign-located workers. An unanticipated domestic monetary expansion proves to produce not only changes in the nominal exchange rate, but also worker relocation through changes in the wage gap. We show that the degree of worker mobility provides the key to understanding the macroeconomic impacts of monetary expansion.
Keywords: International worker mobility, Monetary policy, Exchange rate, Consumption, Welfare
JEL: E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit: General
E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General
Manuscript Received : Sep 22 2020 Manuscript Accepted : Jun 30 2022

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