Bandeira, Guilherme; Caballé, Jordi; Vella, Eugenia - 2021
This paper studies the role of emigration in a deep recession when the government implements fiscal consolidation. We … build a small open economy New Keynesian model with matching frictions and emigration of the labour force. Our simulations … emigration, with the rest attributed to the macro environment. A counterfactual without emigration underestimates the bust in …