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December 22, 2021updated 07 Jan 2022 6:14am

Covid-19 disrupts international migration – leading macroeconomic influencers

US net international migration dropped to its lowest in decades between 2020 and 2021.

Some economists believe that the impact on international migration to and from the US, was partly caused by the Covid-19 pandemic and associated migration policy changes.

David Beckworth

David Beckworth, senior research fellow at the Mercatus Center at the George Mason University and a former international economist at the US Department of the Treasury, retweeted an article shared by Catherine Rampell, an opinion columnist at The Washington Post, on the Covid-19 pandemic having significantly impacted international migration to and from the US. The US Census Bureau data from the 1 July 2021 population estimates show that net international migration (NIM) added 247,000 to the country’s population between 2020 and 2021 – the lowest in decades.

Experts believe that this is a major drop from last decade’s high of 1,049,000 added between 2015 and 2016. Additionally, it is even lower than the 477,000 added between 2019 and 2020, which overlapped with the Covid-19 outbreak.

Most Covid-19 restrictions persisted through 2021, greatly reducing the movement of people in and out of the US. For instance, land borders between the US, Canada, and Mexico remained closed to non-essential travel through June 2021. In addition, three-fourths of the US consulates abroad remained closed for issuing visas.

Adam Posen

Adam Posen, economist and president of the Peterson Institute for International Economics (PIIE) retweeted an article shared by Richard Baldwin, a professor of international economics at the Graduate Institute of International and Development Studies in Geneva, on the sharp inflation swings during the Covid-19 pandemic.

Economists believe that the nonlinearity in the Phillips curve, combined with the impact of global factors such as commodity prices, overall slack, producer price competition, and exchange rates, have all played a major role in driving the sharp swings in inflation during the Covid-19 crisis.

Inflation dropped sharply during the early months of the pandemic, due to the global shutdown of large sectors of the economy and reduced consumer spending as people stayed home and businesses activities came to a standstill. However, the upswing in inflationary pressures in 2021 has been a result of many factors. For instance, the rebound in economic activity increased the demand for energy and other commodities, thereby generating an immediate spike in prices. Additionally, supply chains failed to recover quickly due to increased consumer demand and goods and labour shortages that contributed to higher inflation worldwide.

Nasser Saidi

Nasser Saidi, economist and founder and president of Nasser Saidi and Associates, who also served as the Minister of Economy and Industry and the Vice Governor for the Lebanese central banks, shared a discussion on the risks facing financial markets in 2022, the Covid-19 effects, inflation uncertainty, volatility, and the impact on corporate earnings.

Saidi believes that the global markets will be impacted by the Omicron mutator in 2022. He also stated that this impact will largely be experienced by countries such as the US and Europe, in addition to the risks of monetary policy changes. He also added that the lack of liquidity injections will be most significant in affecting the movement of markets during 2022.

 

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