Short‐term fix or remedy for market failure? Immigration policy as a distinct source of skills

Immigration and the Tech Industry: As a Labor Shortage Remedy, for Innovation or for Cost Savings?

Immigration and the Tech Industry: As a Labor Shortage Remedy, for Innovation, or for Cost Savings?

The two main reasons cited by the U.S. tech industry for hiring foreign workers­­remedying labor shortages and hiring "the best and the brightest"­­are not supported by the data, even after excluding the Indian IT service firms. Instead, the primary goals of employers in hiring the foreign workers are to reduce labor costs and to obtain "indentured" employees. Current immigration policy is caus...

Learning and Adaptation as a Source of Market Failure

A dynamic model of financial markets with learning and strategy adoption is demonstrated to produce episodes of market failure. Traders engage in learning to improve their understanding of the relationship between observed prices and future payoffs. Traders also choose between strategies based on fundamental research or on extracting information from market data. The two evolutionary processes ...

Policy failure or success? Detecting market failure in China's housing market

Due to a high vacancy rate of residential homes, housing prices remain sticky in most urban areas of China, which causes higher searching and bargaining costs. With an inefficient outcome, deadweight loss and market failure arises. To assess the Chinese government’s housing policies in 2010, we develop a dynamic equilibrium model, in which we demonstrate how the sticky price results in market f...

Immigration Restrictions and Labor Market Skills Preliminary and Incomplete

Differences in income levels across countries are generally attributed to differences in productivity. In studies of internal migration (e.g. within the U.S.), it is commonly observed that skilled workers move much more than unskilled workers. The paper analyzes the implications of such differential migration, using a model in which efficiency differences are labor-augmenting, and free trade in...