Daniela Hauser is a Senior Economist in the Model Development Division of the Canadian Economic Analysis Department. Her primary research interests lie in the fields of International Macroeconomics, Monetary and Fiscal Policy, and Applied Macroeconomics. Daniela holds a Ph.D. in Economics from the Universitat Autònoma de Barcelona, Spain.
The optimal currency literature has stressed the importance of labor mobility as a precondition for the success of monetary unions. But only a few studies formally link labor mobility to macroeconomic adjustment and policy. In this paper, we study macroeconomic dynamics and optimal monetary policy in an economy with cyclical labor flows across two distinct regions that share trade links and a common monetary framework.
We build an otherwise-standard business cycle model with housework, calibrated consistently with data on time use, in order to discipline consumption-hours complementarity and relate its strength to the size of fiscal multipliers.
We provide evidence regarding the dynamic behaviour of net labour flows across U.S. states in response to a positive technology shock. Technology shocks are identified as disturbances that increase relative state productivity in the long run for 226 state pairs, encompassing 80 per cent of labour flows across U.S. states in the 1976 - 2008 period.