ABSTRACT
Economists have long held that the unfettered mobility of factors of production across national borders is conducive to long-run economic growth. This chapter aims to make explicit the policy tradeoff between economic growth and homeland security. It contrasts the traditional role contributed by immigration to the role emerging in the knowledge-based economies of the G8 countries. The cross-border mobility of knowledge workers is found to be important not only for increasing the stock of knowledge, but also for the magnitude of knowledge spillovers through entrepreneurial activity. The chapter depicts the tradeoff between homeland security and economic growth. In particular, only by working together with a common goal can the G8 mitigate the tradeoff that has emerged between homeland security and economic growth. The traditional labour market view of immigration is that it equilibrates labour markets at targeted wage levels.
