EJEEP – European Journal of Economics and Economic Policies. Intervention
Published in Print: March 2021 – DOI: 10.4337/ejeep.2021.0074

Migrant inflows, capital outflows, growth and distribution:
should we control capital rather than immigration?

Emiliano Brancaccio, Andrea Califano, Fabiana De Cristofaro *

Abstract. Liberalization policies of international movements of capital and labour have represented a crucial feature of the so-called “globalization” era. More recently, however, several restrictions on migratory movements have been adopted to face the alleged negative effects of immigration. On the contrary, free movement of capital has almost always been preserved. This paper aims at verifying whether this current framework of international economic policy can be justified in economic terms. We propose an unprecedented direct comparison between the macroeconomic and distributive impacts of “extreme” episodes of net capital outflows and net migrant inflows in OECD countries between 1970 and 2016. Applying a fixed effects approach and an event-study approach, we show that GDP growth and functional income distribution have null or even positive statistical relationships with immigration, while they have largely negative statistical relationships with capital flights. More specifically, extreme migrant inflows are not related or in some cases positively related with real GDP growth, real GDP per capita growth and the wage share, while extreme capital outflows are negatively related with real GDP growth and real GDP per capita growth. These results contrast with current policy agendas and seem to suggest that controls should concern capital movements rather than migratory flows of people.

JEL classification: F21, F22, F32, F62, F68.

Keywords: migrant inflows, capital outflows, GDP growth, GDP per capita, wage share, controls of capital movement or immigration.

* Emiliano Brancaccio (Università del Sannio, Benevento, Italy). Andrea Califano (Università di Milano, Italy), Fabiana De Cristofaro (Scuola Superiore Sant’Anna, Pisa, Italy). We would like to thank Eduardo A. Cavallo, Giorgio Fagiolo, Gennaro Zezza and two anonymous reviewers for their useful comments and suggestions. The usual discalimers apply.

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AG 12 FEB 2021 – SUL FINANCIAL TIMES UNA CRITICA A DRAGHI: PIU’ CHE MANAGER KEYNESIANO, SARA’ UN “TECNOCRATE” DELLA “DISTRUZIONE CREATRICE” SCHUMPETERIANA. Alla vigilia dell’insediamento del governo Draghi, il Financial Times pubblica un articolo fortemente critico firmato dall’economista Emiliano Brancaccio e dal collega Riccardo Realfonzo dell’Università del Sannio. Gli autori contestano la “narrativa tecno-Keynesiana” secondo cui Draghi sarebbe stato chiamato a gestire in modo ottimale la “enorme” somma di denaro che verrà dal Recovery Plan europeo. Essi ricordano che nella storia recente dell’Italia l’avvento dei “tecnocrati” ha sempre svolto un ruolo opposto: “indebolire le forze parlamentari per aumentare l’autonomia del governo nella gestione delle poche risorse disponibili nel mezzo di gravi crisi economiche”. Per gli autori fu così durante le crisi del 1992 con Amato-Ciampi e del 2011 con Monti. Con Draghi andrà diversamente? Brancaccio e Realfonzo nutrono dubbi.

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Financial Times, 12 February 2021

Emiliano Brancaccio and Riccardo Realfonzo (University of Sannio, Italy)

Mario Draghi’s new adventure as leader of the Italian government has been charachterised as finding the best “technocrat” to optimally manage the “enormous” amount of money that will arise from the European recovery plan. In this happy Techno-Keynesian narrative, however, something may not work.

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“Le risorse del Recovery Plan sono molto modeste rispetto all’enormità di questa crisi. Draghi rischia di rivelarsi non troppo diverso dai governi “tecnici” che l’hanno preceduto”.

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Traduction en français du débat entre Olivier Blanchard et Emiliano Brancaccio, avec une introduction par Massimo Amato (Cahiers d’Économie Politique – 78/2020).

“[…] Le malaise, pourrait-on dire, s’appelle simplement capitalisme (c’est la version de Brancaccio), ou (et c’est la version de Blanchard) cette tendance apparemment irrépressible du système économique fondé sur les interactions d’acteurs de marché décentrés à produire, parfois mais toujours inopinément, l’opposé de ce qu’il est censé atteindre, à savoir : un équilibre unique, capable d’articuler sans contradiction l’efficience de la production et la justice de la distribution. Nous retrouvons convoqués ici de façon même pas trop implicite les deux auteurs qui ont donné du capitalisme une interprétation axée sur sa capacité à engendrer par lui-même sa propre crise : j’ai nommé Marx et Keynes […] Et pourtant, l’une des raisons du débat était le livre de Brancaccio, “Anti-Blanchard”. Que Blanchard ait accepté de dialoguer avec l’auteur d’un livre portant un tel titre, cela seul témoigne de son ouverture d’esprit […]” (extrat de l’intro de Massimo Amato au débat)

website des “Cahiers d’économie politique”