A surge in immigration has made the U.S. economy more competitive by preventing wages from rising more than they otherwise would have

A surge in immigration has made the U.S. economy more competitive by preventing wages from rising more than they otherwise would have, the head of the International Monetary Fund said.

Asked to explain why U.S. economic growth is currently outpacing Europe, IMF Managing Director Kristalina Georgieva cited “abundant labor coming across the border,” alongside innovation and relatively moderate energy prices.

“It creates a domestic political problem,” said Georgieva, who was just selected to serve a second term at the IMF’s helm. “Not everybody who crosses the border adds positively to the economy. But that labor supply also gave to the United States another comparative advantage: Wages are not pushing up, because there is no strong pressure because of lack of labor."