The European refugee crisis and the natural rate of output / Katja Heinisch, Klaus Wohlrabe
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The European refugee crisis and the natural rate of output
Discovery
872768031
URN
urn:nbn:de:gbv:3:2-66069
DOI
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Publication history
Halle (Saale), Germany : Halle Institute for Economic Research (IWH), November 2016
Content
1 Online-Ressource (III, 8 Seiten, 0,65 MB) : Diagramme
Edition
Language
eng
Comment
Abstract
The European Commission follows a harmonized approach for calculating structural (potential) output for EU member states that takes into account labor as an important ingredient. This paper shows how the recent huge migrants inflow to Europe affects trend output. Due to the fact that the immigrants immediately increase the working population but effectively do not enter the labor market, we illustrate that the potential output is potentially upward biased without any corrections. Taking Germany as an example, we find that the average medium-term potential growth rate is lower if the migration flow is modeled adequately compared to results based on the unadjusted European Commission procedure.
Series
IWH-Diskussionspapiere ; no. 30/2016 ppn:837399270