Document Type : Article-Based Dissertations
Authors
1 Department of Economic, Faculty of Economic and Management, Shiraz Branch, Islamic Azad University, Shiraz, Iran
2 Shiraz
3 Department.economic.a managment.shiraz branch.islamic.azad.univercity.shiraz.iran
Abstract
This paper examines the effects of migration on Iran's business cycles in the framework of a Bayesian dynamic stochastic general equilibrium model. Migration in the present study is defined as a shock, which is explained as a first-order autoregression process. This shock enters the model through changes in human capital and is effective in causing fluctuations in economic variables by changing the structure of population and human capital. Two tools of variance decomposition and impulse response functions have been used to analyze the effects of migration on the business cycles of the Iranian economy. Based on the results of variance decomposition, the migration shock explains more than 20% of output fluctuations, more than 14% of consumption fluctuations and more than 10% of housing price fluctuations for the Iranian economy. Also, based on the results of the impulse response functions of the variables, in response to the shock of migration, output, consumption, investment, capital formation in the housing sector, human capital, employment, wages, and capital stock decrease, while housing prices increase. Finally, based on the results obtained from the estimation of the final likelihood of the model based on the Laplace approximation, different scenarios regarding the effects of immigration on human capital are compared. The results show that the model with a lower ratio of human capital of immigrants compared to internal human capital is accepted.
Keywords: Migration, Human Capital, DSGE Model, Business Cycles
JEL Classification: E44, O15, E32, F22
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