Magnusson, Kristin () (Dept. of Economics, Stockholm School of Economics)
Abstract
The current economic slowdown in the United States and the decline in remittance growth to some Latin American countries have intensified the interest in the relationship between these variables. We investigate whether host country conditions affect remittance outflows to Latin America, focusing on the roles of regional U.S. business cycles, geographical variation in immigrant density and sectoral factors. Using quarterly data for 1995-2008, we find that remittance flows are strongly influenced by economic conditions in the specific regions of the U.S. where migrants are clustered, as well as in the sectors especially important for immigrants' employment opportunities. The results are in sharp contrast to previous research suggesting that remittance flows are relatively insensitive to fluctuations in the aggregate U.S. business cycle. Precise estimation of these linkages is also shown to matter for gauging the sensitivity of remittances to economic conditions in the home country, and hence the extent to which remittances might buffer domestic shocks as well as transmitting external ones.
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Length: 25 pages Date of creation: 16 Feb 2009 Date of revision: Handle: RePEc:hhs:hastef:0710
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Find related papers by JEL classification: E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles F15 - International Economics - - Trade - - - Economic Integration F22 - International Economics - - International Factor Movements and International Business - - - International Migration F24 - International Economics - - International Factor Movements and International Business - - - Remittances R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Michael T. Owyang & David E. Rapach & Howard J. Wall, 2008.
"States and the business cycle,"
Working Papers
2007-050, Federal Reserve Bank of St. Louis.
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