Hippolyte d’Albis

Macroeconomic evidence suggests that asylum seekers are not a “burden” for Western European countries

We use an econometric model to show that asylum seekers do not deteriorate host countries’ economic performance or fiscal balance. This paper aims to evaluate the economic and fiscal effects of inflows of asylum seekers into Western Europe from 1985 to 2015. It relies on an empirical methodology that is widely used to estimate the macroeconomic effects of structural shocks and policies. It shows that inflows of asylum seekers do not deteriorate host countries’ economic performance or fiscal balance because the increase in public spending induced by asylum seekers is more than compensated for by an increase in tax revenues net of transfers. As asylum seekers become permanent residents, their macroeconomic impacts become positive.

Collateral constraints and rental markets

We study a benchmark model with collateral constraints and heterogeneous discounting. Contrarily to a rich literature on borrowing limits, we allow for rental markets. By incorporating this missing market, we show that impatient agents choose to rent rather than to own the collateral in the neighborhood of the deterministic steady state. Consequently, impatient agents are not indebted and borrowing constraints play no role in local dynamics.