Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/148041
Authors: 
Heinisch, Katja
Wohlrabe, Klaus
Year of Publication: 
2016
Series/Report no.: 
IWH Discussion Papers 30/2016
Abstract: 
The European Commission follows a harmonized approach for calculating structural (potential) output for EU member states that takes into account labor as an important ingredient. This paper shows how the recent huge migrants inflow to Europe affects trend output. Due to the fact that the immigrants immediately increase the working population but effectively do not enter the labor market, we illustrate that the potential output is potentially upward biased without any corrections. Taking Germany as an example, we find that the average medium-term potential growth rate is lower if the migration flow is modeled adequately compared to results based on the unadjusted European Commission procedure.
Subjects: 
migration
refugee crisis
natural rate of output
filtering
EU-commission
JEL: 
F22
J11
J61
Document Type: 
Working Paper

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