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Title:Does immigration affect the Phillips curve? Some evidence for Spain PDF Logo
Authors:Bentolila, Samuel
Dolado, Juan José
Jimeno, Juan F.
Issue Date:2007
Series/Report no.:IZA Discussion Papers 3249
Abstract:The Phillips curve has flattened in Spain over 1995-2006: unemployment has fallen by 15 percentage points, with roughly constant inflation. This change has been more pronounced than elsewhere. We argue that this stems from the immigration boom in Spain over this period. We show that the New Keynesian Phillips curve is shifted by immigration if natives' and immigrants' labour supply or bargaining power differ. Estimation of the curve for Spain indicates that the fall in unemployment since 1995 would have led to an annual increase in inflation of 2.5 percentage points if it had not been largely offset by immigration.
Subjects:Immigration
Phillips curve
JEL:E31
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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