Chapter 8

Migration: A Political Problem, an Economic Problem, or Both?


Trade in goods is a substitute for factor mobility, as far as profit maximization is concerned. A policy-cum-investment question is to determine which of the global market clearing mechanisms that the profit maximizing process will choose: migration or trade in goods and services. Profit maximizing agents will always choose the least costly way, and that depends on true transportation costs, trade barriers, and any other obstacles that a national government, trade union, or any other national group may impose on the flow of goods, migration, and mobility across the domestic economy, as well as across national borders. One important point to keep in mind is that goods ...

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