長崎大学経済学部

研究活動

Abstract:
Assuming a symmetric two-country economy with international migration of labor and efficiency wages, an attempt is made to show which of the two regimes, non-cooperation or inter-government cooperation in the monetary field, is advantageous. For this purpose, workers are assumed to migrate between two countries due to real-consumption wage differentials, and nominal wages are determined according to the non-shirk model (Shapiro and Stiglitz, 1984). This paper shows that not only the utility of the policy authority but also that of the workers is higher under inter-government cooperation than under non-cooperation provided that migration flows are sufficiently sensitive to changes in real-consumption wage differentials. In other words, inter-government cooperation may prove to be advantageous not only to the policy authority but also to the workers. This result is in contrast to the one derived by Agiomirgianakis (1998); according to him, in a symmetric two-country economy with labor migration and labor unions, the utility of the policy authority is higher under inter-government cooperation than under non-cooperation, while the utility of labor union does not differ across regimes. This result implies that inter-government cooperation appears to be more compatible with open economies that are characterized by migration and efficiency wages.

Keywords:
Monetary policy games; International migration of labor; Efficiency wages; Two-country economy