October 1, 2011

IF DEMOCRATS HAD REALLY WANTED TO STIMULATE THE ECONOMY...:

Economics and Emigration: Trillion-Dollar Bills on the Sidewalk? (Michael Clemens, August 2011, Journal of Economic Perspectives)

Researchers have built models of the world economy to estimate the gains from
eliminating various barriers to trade, capital flows, and migration. Table 1 summarizes
several recent estimates for policy barriers to trade, and (to my knowledge) all existing
estimates for barriers to capital flows and migration. Even without delving into the
details of these studies, the overall pattern is unmistakable and remarkable: The gains
from eliminating migration barriers dwarf--by an order of magnitude or two--the gains
from eliminating other types of barriers. For the elimination of trade policy barriers and
capital flow barriers, the estimated gains amount to less than a few percent of world
GDP. For labor mobility barriers, the estimated gains are often in the range of 50-150
percent of world GDP.

In fact, existing estimates suggest that even small reductions in the barriers to labor
mobility bring enormous gains. In the studies of Table 1, the gains from complete
elimination of migration barriers are only realized with epic movements of people--at
least half the population of poor countries would need to move to rich countries. But
migration need not be that large in order to bring vast gains. A conservative reading of
the evidence in Table 2, which provides an overview of efficiency gains from partial
elimination of barriers to labor mobility, suggests that the emigration of less than 5
percent of the population of poor regions would bring global gains exceeding the gains
from total elimination of all policy barriers to merchandise trade and all barriers to
capital flows.


...they would have just lifted trade and immigration restrictions.  As is, it's obvious how to generate Reaganesque growth again.
Posted by at October 1, 2011 7:24 AM
  

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