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The Impact Of The Us Recession On Immigrant Remittances In Central America

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  • KARLA BORJA

    (The University of Tampa, 401 W. Kennedy Blvd., Tampa, FL 33606, USA)

Abstract

The United States (US) economic recession has considerably affected employment among its immigrant Hispanic community, and as a consequence, remittances to Central America have plunged more than in any other region in the world. This paper provides evidence that the US housing crisis and the subsequent economic recession have affected the Central American region's Gross Domestic Product (GDP) beyond the traditional means of exports, exchange rates, and interest rates, namely, through remittances as well. Using a Vector Autoregression (VAR) model, we examine the case of El Salvador and find that major disturbances to the US economy have an immediate and substantial impact on remittances to this Central American nation.

Suggested Citation

  • Karla Borja, 2012. "The Impact Of The Us Recession On Immigrant Remittances In Central America," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(03), pages 1-24.
    • Handle: RePEc:wsi:jicepx:v:03:y:2012:i:03:n:s1793993312500202
    DOI: 10.1142/S1793993312500202
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    References listed on IDEAS

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    1. Connel Fullenkamp & Mr. Thomas F. Cosimano & Michael T. Gapen & Mr. Ralph Chami & Mr. Peter J Montiel & Mr. Adolfo Barajas, 2008. "Macroeconomic Consequences of Remittances," IMF Occasional Papers 2008/001, International Monetary Fund.
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    3. Mrs. Ewa Gradzka & Mr. Shaun K. Roache, 2007. "Do Remittances to Latin America Depend on the U.S. Business Cycle?," IMF Working Papers 2007/273, International Monetary Fund.
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    6. Freund, Caroline & Spatafora, Nikola, 2005. "Remittances : transaction costs, determinants, and informal flows," Policy Research Working Paper Series 3704, The World Bank.
    7. Alejandra Cox Edwards & Manuelita Ureta, 2003. "International Migration, Remittances, and Schooling: Evidence from El Salvador," NBER Working Papers 9766, National Bureau of Economic Research, Inc.
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    9. Edwards, Alejandra Cox & Ureta, Manuelita, 2003. "International migration, remittances, and schooling: evidence from El Salvador," Journal of Development Economics, Elsevier, vol. 72(2), pages 429-461, December.
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    Cited by:

    1. VACAFLORES, Diego E. & BECKWORTH, David, 2015. "Latin American Remittances Dependence On External Shocks," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 15(2), pages 115-128.
    2. Mack, Elizabeth A. & Sauls, Laura Aileen & Jokisch, Brad D. & Nolte, Kerstin & Schmook, Birgit & He, Yifan & Radel, Claudia & Allington, Ginger R.H. & Kelley, Lisa C. & Scott, Christian Kelly & Leisz,, 2023. "Remittances and land change: A systematic review," World Development, Elsevier, vol. 168(C).

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    More about this item

    Keywords

    Remittances; Central America; VAR models; impulse response functions; E32; F22; F24; O54;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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