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International business cycles and remittance flows

Author

Listed:
  • Cooray Arusha

    (School of Economics, University of Wollongong, Wollongong, NSW 2522, Australia)

  • Mallick Debdulal

    (School of Accounting, Economics and Finance, 70 Elgar Road, Burwood, Victoria 3125, Australia, and Alfred Deakin Research Institute)

Abstract

In this paper, we study the macroeconomic determinants of remittance flows. We place particular attention to fluctuations in remittance flows over the international business cycles. Estimating a dynamic panel data model using the system-GMM method over the period 1970–2007, we document that remittance inflows decrease with home country volatility. Contrarily, remittance inflows increase with the volatility in host countries, especially for middle-income countries. Lower interest rates in host countries lead to larger remittance outflows. Trade and capital account openness are the most important factors that determine both remittance inflows and outflows. We conclude that macroeconomic factors of both home and host countries are important for understanding remittance flows.

Suggested Citation

  • Cooray Arusha & Mallick Debdulal, 2013. "International business cycles and remittance flows," The B.E. Journal of Macroeconomics, De Gruyter, vol. 13(1), pages 1-33, September.
  • Handle: RePEc:bpj:bejmac:v:13:y:2013:i:1:p:33:n:22
    DOI: 10.1515/bejm-2013-0030
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    Cited by:

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    6. Éric Rougier & Nicolas Yol, 2019. "The volatility effect of diaspora's location," The World Economy, Wiley Blackwell, vol. 42(6), pages 1796-1827, June.
    7. Hathroubi, Salem & Aloui, Chaker, 2016. "On interactions between remittance outflows and Saudi Arabian macroeconomy: New evidence from wavelets," Economic Modelling, Elsevier, vol. 59(C), pages 32-45.
    8. Adriana R. Cardozo Silva & Luis R. Diaz Pavez & Inmaculada Martínez‐Zarzoso & Felicitas Nowak‐Lehmann, 2022. "The impact of COVID‐19 government responses on remittances in Latin American countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(4), pages 803-822, May.
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    11. Amr Hosny, 2020. "Remittance Concentration and Volatility: Evidence from 72 Developing Countries," International Economic Journal, Taylor & Francis Journals, vol. 34(4), pages 553-570, October.
    12. Giulia Bettin & Andrea F. Presbitero & Nikola L. Spatafora, 2017. "Remittances and Vulnerability in Developing Countries," The World Bank Economic Review, World Bank Group, vol. 31(1), pages 1-23.
    13. Alessio Ciarlone, 2023. "Remittances in times of crisis: evidence from Italian corridors," Temi di discussione (Economic working papers) 1402, Bank of Italy, Economic Research and International Relations Area.
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    15. Laurent, Thibault & Margaretic, Paula & Thomas-Agnan, Christine, 2021. "Do neighboring countries matter when explaining bilateral remittances?," TSE Working Papers 21-1221, Toulouse School of Economics (TSE).
    16. Gnangnon, Sèna Kimm, 2023. "Duration of membership in the world trade organization and investment-oriented remittances inflows," The Quarterly Review of Economics and Finance, Elsevier, vol. 88(C), pages 258-277.
    17. Alshammari Nayef & Faras Reyadh & Alshuwaiee Wael, 2022. "Economic and Political Drivers of Remittance Transfer," South East European Journal of Economics and Business, Sciendo, vol. 17(1), pages 54-67, June.
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    19. Hrushikesh Mallick & Mantu Kumar Mahalik, 2016. "Motivating Factors Of Remittances Inflows Into Developing Asian Economies," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(04), pages 1-26, September.

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    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances

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