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Cyclical Properties of Migrant's Remittances to Pakistan: What the data tell us

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  • Junaid Ahmed

    ()
    (Development Economics Research Group)

Abstract

Migrant's remittances are a growing source of foreign funds for several developing countries including Pakistan. Despite a burgeoning body of literature and growing interest in migrants' remittances and its impact on recipient's economies, relatively little work exists on the business cycle characteristics of remittances to Pakistan. This study analyzes whether remittance act pro- or counter-cyclically in the face of external and internal economic shocks by employing annual data from 1973-2010 for Pakistan. The results show that migrant's remittances are counter-cyclical with respect to home output and households consumption. Remittances are found to be acyclical with the output of Pakistan's major remittances sources such as the United States and United Kingdom. Remittances from Saudi Arabia, however, show mixed results. The overall impact of remittance inflows to Pakistan appears to be a stabilizing one.

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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 32 (2012)
Issue (Month): 4 ()
Pages: 3266-3278

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Handle: RePEc:ebl:ecbull:eb-12-00672

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Keywords: migrant's remittances; business cycle; real output; households consumption; Pakistan.;

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References

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  1. Samir Jahjah & Ralph Chami & Connel Fullenkamp, 2003. "Are Immigrant Remittance Flows a Source of Capital for Development," IMF Working Papers, International Monetary Fund 03/189, International Monetary Fund.
  2. Roberto Coronado, 2009. "Business cycles and remittances: can the Beveridge-Nelson decomposition provide new evidence?," Globalization and Monetary Policy Institute Working Paper, Federal Reserve Bank of Dallas 40, Federal Reserve Bank of Dallas.
  3. Mazhar MUGHAL & Amar Iqbal ANWAR, 2012. "Remittances, Inequality and Poverty in Pakistan: Macro and Microeconomic Evidence," Working Papers, CATT - UPPA - Université de Pau et des Pays de l'Adour 2012-2013_2, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Aug 2012.
  4. Farid Makhlouf & Mazhar Mughal, 2013. "Remittances, Dutch Disease, And Competitiveness: A Bayesian Analysis," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, Chung-Ang Unviersity, Department of Economics, vol. 38(2), pages 67-97, June.
  5. Şule Akkoyunlu & Konstantin A. Kholodilin, 2008. "A Link Between Workers' Remittances and Business Cycles in Germany and Turkey," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., M.E. Sharpe, Inc., vol. 44(5), pages 23-40, September.
  6. Giuliano, Paola & Ruiz-Arranz, Marta, 2006. "Remittances, Financial Development, and Growth," IZA Discussion Papers, Institute for the Study of Labor (IZA) 2160, Institute for the Study of Labor (IZA).
  7. Carlos Vargas-Silva, 2009. "Are Remittances Manna From Heaven? A Look at the Business Cycle Properties of Remittances," Working Papers, Sam Houston State University, Department of Economics and International Business 0905, Sam Houston State University, Department of Economics and International Business.
  8. Marianne Baxter & Robert G. King, 1999. "Measuring Business Cycles: Approximate Band-Pass Filters For Economic Time Series," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 81(4), pages 575-593, November.
  9. Sayan, Serdar & Tekin-Koru, Ayca, 2007. "Remittances, Business Cycles and Poverty: The Recent Turkish Experience," MPRA Paper, University Library of Munich, Germany 6029, University Library of Munich, Germany.
  10. Serdar Sayan, 2006. "Business Cycles and Workers' Remittances," IMF Working Papers, International Monetary Fund 06/52, International Monetary Fund.
  11. Morten O. Ravn & Harald Uhlig, 2002. "On adjusting the Hodrick-Prescott filter for the frequency of observations," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 84(2), pages 371-375.
  12. Mazhar Y. Mughal, 2013. "Remittances As Development Strategy: Stepping Stones Or Slippery Slope?," Journal of International Development, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 25(4), pages 583-595, 05.
  13. Sayan, Serdar & Tekin-Koru, Ayca, 2007. "Business Cycles and Remittances: A Comparison of the Cases of Turkish Workers in Germany and Mexican Workers in the US," MPRA Paper, University Library of Munich, Germany 6030, University Library of Munich, Germany.
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Cited by:
  1. Ahmed, Junaid & Martinez-Zarzoso, Inmaculada, 2013. "Blessing or curse: The stabilizing role of remittances, foreign aid and FDI to Pakistan," Center for European, Governance and Economic Development Research Discussion Papers, University of Goettingen, Department of Economics 153, University of Goettingen, Department of Economics.
  2. Amar Iqbal ANWAR & Mazhar Yasin MUGHAL, 2013. "Foreign Financial Flows and Terrorism in Developing Countries," Working Papers, CATT - UPPA - Université de Pau et des Pays de l'Adour 2013-2014_1, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Sep 2013.
  3. Mazhar MUGHAL & Junaid AHMED, 2013. "Remittances and Business Cycles: Comparison of South Asian Countries," Working Papers, CATT - UPPA - Université de Pau et des Pays de l'Adour 2012-2013_4, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Jan 2013.

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