Ivo Družić

Effects of Migration on European Labour Market Equilibrium

This paper investigates the labour market effects of migration-related supply shocks on labour market. Immigration has become important socio-economic phenomenon for many countries in globalized world. It is therefore the subject of increasingly vigorous political debate. Focusing mostly on European migration, we provide an evaluative review which aims to enhance the understanding of migration and its potential role for development. However, regardless of (i) the demographic change that induces population ageing, low fertility rates, and increase in life expectancy, as well as (ii) a labour market that is characterized by high levels of unemployment for low-skilled people and a simultaneous shortage of skilled workers that the EU is facing today, it still lacks the common immigration policy that would address this issues. In such a situation, an economically motivated common immigration policy at the European level can result in welfare improvements.

Gravity Model of Croatian Regional Foreign Trade

Application of the Newton’s law of universal gravitation in explaining international trade has proved to be a successful empirical experiment. The use of relatively simple and easy-to-get data, such as the GDP and distance has made the gravity model particularly popular in explaining trade patterns of transitional economies that lack more sophisticated and longer-series data on foreign trade. One of the main characteristics of a small open economy is the importance of international trade which represents the key determinant in country’s economic growth. For that reason, deeper analysis of this type of a problem is essential and foreign merchandise trade of Croatia suits as a perfect candidate for such analysis. Another significant advantage that stems out of the gravity theory is the possibility of evaluating regional patterns of trade.