Macroeconomic determinants of migrants' remittances : New evidence from a panel VAR
Abstract
This paper examines the macroeconomic determinants of migrants' remittances cycles. The study uses panel VAR methods in order to compensate for both data limitations and endogeneity among variables. The analysis considers annual data for 16 latin and Caribbean countries. By using these data I compute variance decompositions (VDCs) and impulse response functions (IRFs). The VDCs show that the forecast error variance of remittances is explained by host country GDP, home country GDP and the differential of interest rates between home and host countries. The IRFs analysis confirms these findings. First, the IRFs show that remittances respond positively to boom in host country. Second, for altruistic motivations, a recession in home country is accompanied by a increase in remittances inflows. The last result, related to self-interested motivations, is the increase in remittances inflows following a rise in the differential of interest rates between home and host countries.Download Info
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Paper provided by Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne in its series Documents de travail du Centre d'Economie de la Sorbonne with number 09007.Length: 26 pages
Date of creation: Feb 2009
Date of revision:
Handle: RePEc:mse:cesdoc:09007
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Keywords: International migration; remittances; business cycles.;Other versions of this item:
- Dramane Coulibaly, 2009. "Macroeconomic Determinants of Migrants' Remittances : New Evidence from a panel VAR," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00367704, HAL.
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- F24 - International Economics - - International Factor Movements and International Business - - - Remittances
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O54 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-23 (All new papers)
- NEP-MAC-2009-05-23 (Macroeconomics)
- NEP-MIG-2009-05-23 (Economics of Human Migration)
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