This study develops a one-sector, small open economy growth model to examine the effects of temporary migration on macroeconomic stability and growth of host countries. The analysis focuses on general production technology, treating native and immigrant workers as distinct labor inputs. Findings suggest that diminished marginal returns to capital may be responsible for the emergence of equilibrium indeterminacy. However, when the social benefits of production differ from private benefits, the model exhibits a unique saddle-path equilibrium with no endogenous growth.
Temporary migration, indeterminacy and growth / Parello, C. P.. - In: ECONOMIC MODELLING. - ISSN 0264-9993. - 149:(2025), pp. 1-13. [10.1016/j.econmod.2025.107112]
Temporary migration, indeterminacy and growth
Parello C. P.
2025
Abstract
This study develops a one-sector, small open economy growth model to examine the effects of temporary migration on macroeconomic stability and growth of host countries. The analysis focuses on general production technology, treating native and immigrant workers as distinct labor inputs. Findings suggest that diminished marginal returns to capital may be responsible for the emergence of equilibrium indeterminacy. However, when the social benefits of production differ from private benefits, the model exhibits a unique saddle-path equilibrium with no endogenous growth.| File | Dimensione | Formato | |
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Parello_Temporary_2025.pdf
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