Immigration reduces inflation in US – IMF paper
But immigrants put upward pressure on house prices, study finds
Immigration into the US slightly lowers inflation overall, a working paper published by the International Monetary Fund finds.
The paper notes there was an increase in immigration to the US alongside the post-Covid surge in inflation, but that it is not immediately obvious what effect immigration has on prices. Inflows of workers boost the labour supply, thereby reducing wage pressures. However, the increase in population also adds to the demand for goods and services, which pushes up prices.
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