(23.10.2013) Norway has experienced a strong growth in the population the recent years due to high immigration. In the event of a set-back in the economy, net immigration could change rapidly.
By Kyrre Aamdal, Senior economist, DNB Markets
Sharp turnaround in immigration have been observed in some other countries, like Ireland and Spain. Sharp drop in population growth have often been followed by excess capacity in the housing market with a marked decline in home prices.
In general: economic boom in some countries may attract foreign workers and thus increase immigration. But higher immigration may boost domestic demand and thus intensify the boom.
Other way around: when the economy goes weaker, immigration may decline and contribute to lower domestic demand.
Is this true? Will higher immigration create more fluctuations? Or will more elastic labour supply contribute to a more stable economic development. Today's MacroFocus touch upon these questions.
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