Le rimesse dei lavoratori emigrati e le crisi di conto corrente
AbstractThis paper combines the literature on financial crises with that on international immigrations by investigating whether the increasingly large flows of workersÂ’ remittances can help reduce the probability of current account reversals. The rationale for this stands in the great stability and low cyclicality of remittances as compared to other private capital flows; these properties, combined with the fact that remittances are cheap inflows of foreign currencies, might reduce the probability that external financing gets restrained triggering a sharp current account adjustment. We find that remittances can indeed have such a beneficial effect. In particular, we show that a high level of remittances, as a ratio of GDP, makes the relationship between a decreasing stock of international reserves (over GDP) and a higher probability of current account reversals less stringent. The same occurs, though less neatly, for the positive relationship between an increasing stock of external debt (over GDP) and the probability of reversals. Our results point also to a threshold effect of remittances; the mechanism just described is, in fact, much stronger when remittances are above 3 percent of GDP.
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Bibliographic InfoPaper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 573.
Date of creation: Jan 2006
Date of revision:
current account reversals; workersÂ’ remittances; international reserves; external debt;
Find related papers by JEL classification:
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-03-05 (All new papers)
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