The seminar is part of the activities of FIW, the Centre of Competence in International Economics. Regular lecture series on current issues in international economics.

Location: wiiw Wiener Institut für Internationale Wirtschaftsvergleiche, Rahlgasse 3, 1060 Wien

June 12th, 4 pm

Eddy Bekkers (with Joseph Francois)

JKU Linz

Abstract:

We show that the Ethier-Krugman monopolistic competition model and the Melitz firm heterogeneity model can be defined as an Armington model with generalized marginal costs and generalized trade costs. As already known in the literature in both the Ethier-Krugman model and the Melitz model generalized marginal costs are a function of the amount of factor input bundles. In the Melitz model generalized marginal costs are also a function of the price of the factor input bundles. Lower factor prices raise the number of firms that can enter the market profitably (extensive margin), reducing generalized marginal costs of a representative firm. For the same reason the Melitz model features a demand externality: in a larger market more firms can enter. The different models are simulated employing the Armington representation using GTAP trade data on 109 countries. It is shown that the outcomes of the Melitz model are exactly identical to the outcomes of the Ethier-Krugman model if the firm size distribution is granular. The Armington representation of the firm heterogeneity model is in particular useful for multisector CGE models.

Keywords: Firm Heterogeneity, CGE Model, Demand Externality

JEL classification: F12

April 10th, 4 pm

Miriam Manchin (with Robert Manchin and Sultan Orazbayev)

University College London

Abstract

Using a large survey spanning several years and many countries, this paper looks at the determinants of the desire to migrate internationally and domestically. In particular, we empirically analyse the importance of satisfaction with local and country-level amenities in driving migration decisions both for international and domestic migration. In addition, we also investigate the importance of social networks both at the individual’s current location and abroad. We find that satisfaction with local amenities together with social networks are the most important driving forces of both domestic and international migration intensions. We also find that when looking at labour market characteristics in terms of average wages and unemployment rates at regional and national level, it is the individual perception of personal job prospects, personal income, and contentment with local amenities which matters more than average labour market conditions.

Keywords: international and local migration, desire to migrate

JEL Classification: F22