Economic volatility and remittances: evidence from SIDS
AbstractPurpose – The purpose of this paper is to investigate the potential link between remittances and economic volatility in small island developing states. Design/methodology/approach – The paper estimates a panel data model using a database containing 20 small island developing states (SIDS) observed over annual intervals between 1986 and 2005. Findings – The results suggest that, in general, remittance flows have a stabilising influence on output and investment volatility. However, given the importance of these flows to SIDS, the volatility of remittances also has a significant and positive impact on both investment and consumption volatility. Practical implications – The policy implications of the study's findings is that SIDS (similar to how oil-producing nations take oil price fluctuations into account when considering policy changes) may have to monitor and forecast future remittance flows and take these projections into account when making changes to either their monetary or fiscal policy stance. Originality/value – Workers' remittances have grown dramatically worldwide, particularly in SIDS, where they constitute one of the main sources of foreign exchange. Given the importance of these flows to economic growth and development in these countries, this study examines the potential link between remittances and economic volatility.
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Bibliographic InfoArticle provided by Emerald Group Publishing in its journal Journal of Economic Studies.
Volume (Year): 36 (2009)
Issue (Month): 2 (May)
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Web page: http://www.emeraldinsight.com
Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
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- Muhammad Shahbaz & Ijaz Rehman & Nurul Mahdzan, 2014.
"Linkages between income inequality, international remittances and economic growth in Pakistan,"
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- Shahbaz, Muhammad & Ur Rehman, Ijaz & Ahmad Mahdzan, Nurul Shahnaz, 2013. "Linkages between Income Inequality, International Remittances and Economic Growth in Pakistan," MPRA Paper 45577, University Library of Munich, Germany, revised 20 Mar 2013.
- Cooray Arusha & Mallick Debdulal, 2013.
"International business cycles and remittance flows,"
The B.E. Journal of Macroeconomics,
De Gruyter, vol. 13(1), pages 33, September.
- Mallick, Debdulal & Cooray, Arusha, 2010. "International Business Cycles and Remittance Flows," MPRA Paper 25675, University Library of Munich, Germany.
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