Advanced Search
MyIDEAS: Login to save this article or follow this journal

Do Remittances Induce Inflation? Fresh Evidence from Developing Countries


Author Info

  • Paresh Kumar Narayan

    (School of Accounting, Economics and Finance, 70 Edgar Road, Burwood, 3125, Melbourne, Australia)

  • Seema Narayan

    (School of Marketing, Economics and Finance, Royal Melbourne Institute of Technology, Melbourne, Australia)

  • Sagarika Mishra

    (School of Accounting, Economics and Finance, 70 Edgar Road, Burwood, 3125, Melbourne, Australia)


The goal of this article is to examine the determinants of inflation in both the short run and the long run for 54 developing countries using a panel data set covering the 1995–2004 period. Apart from the commonly used economic determinants of inflation, we model the impact of remittances and institutional variables on inflation. Using the Arellano and Bond panel dynamic estimator and the Arellano and Bover and the Blundell and Bond system generalized method of moments estimator, we find evidence that in developing countries remittances generate inflation. The effect of remittances on inflation is more pronounced in the long run. Moreover, we find that openness, debt, current account deficits, the agricultural sector, and the short-term U.S. interest rate have a positive effect on inflation. We also find that improvements in democracy reduce inflation.

Download Info

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Bibliographic Info

Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 77 (2011)
Issue (Month): 4 (April)
Pages: 914-933

as in new window
Handle: RePEc:sej:ancoec:v:77:4:y:2011:p:914-933

Contact details of provider:
Web page:
More information through EDIRC

Related research


Find related papers by JEL classification:


No references listed on IDEAS
You can help add them by filling out this form.


Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Satti, Saqlain Latif & Shahbaz, Muhammad & Mujahid, Nooreen & Ali, Amjad, 2013. "Impact of Financial Development and Globalization on Inflation: The Role of Remittance and Economic Growth in Bangladesh," MPRA Paper 51675, University Library of Munich, Germany, revised 21 Nov 2013.
  2. Termos, Ali & Naufal, George & Genc, Ismail, 2013. "Remittance outflows and inflation: The case of the GCC countries," Economics Letters, Elsevier, Elsevier, vol. 120(1), pages 45-47.
  3. Catalina Amuedo-Dorantes & Susan Pozo, 2012. "Remittance Income Volatility and Labor Supply in Mexico," Southern Economic Journal, Southern Economic Association, Southern Economic Association, vol. 79(2), pages 257-276, October.
  4. Randazzo, Teresa & Piracha, Matloob, 2014. "Remittances and Household Expenditure Behaviour in Senegal," IZA Discussion Papers 8106, Institute for the Study of Labor (IZA).


This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


Access and download statistics


When requesting a correction, please mention this item's handle: RePEc:sej:ancoec:v:77:4:y:2011:p:914-933. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Laura Razzolini).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.