Are remittances a stabilizing factor in the Mexican economy?
AbstractThis paper evaluates whether remittances can function as a countercyclical mechanism for a recessive phase of the business cycle in Mexico. Remittances have resulted from the intense migration of Mexican workers to the USA during the nineties. The flow of remittances in Mexico had an explosive growth until the year 2006; since 2007, a drastic drop in this growth is observed, and in 2008 it became negative. A panel data model was established using information of the GDP and remittances at the state level for the period 2005-2008. This methodology considersthe regional effects of remittances on the economic growth of the Mexican economy. The econometric results of the analysis indicated that remittances have a positive coefficient with respect to the position of the business cycle in Mexico. Additionally, the findings weaken the positions of those that consider the strategy of promoting remittances for use as a tool formacroeconomic stabilization of the business cycle.
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Bibliographic InfoArticle provided by Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia. in its journal EconoQuantum, Revista de Economia y Negocios.
Volume (Year): 9 (2012)
Issue (Month): 1 (Enero-Junio)
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More information through EDIRC
remittances; Mexican economy; GDP; economic cycles; economic integration;
Find related papers by JEL classification:
- F24 - International Economics - - International Factor Movements and International Business - - - Remittances
- F15 - International Economics - - Trade - - - Economic Integration
- F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
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- Miguel D. Ramirez & Hari Sharma, 2009.
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IMF Staff Papers,
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Discussion Papers of DIW Berlin
566, DIW Berlin, German Institute for Economic Research.
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- Hodrick, Robert J & Prescott, Edward C, 1997. "Postwar U.S. Business Cycles: An Empirical Investigation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(1), pages 1-16, February.
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