International Business Cycles and Remittance Flows
AbstractIn this paper, we investigate the macroeconomic determinants and the effect of host country business cycles on remittance inflows. Estimating a dynamic panel data model by the system GMM, we document that remittance inflows are pro-cyclical to home country volatility but counter-cyclical to the volatility in host countries. This result does not hold for high income counties for which remittance inflows are acyclical to home country volatility but pro-cyclical to the volatility in host countries. For a host country, remittance outflows are counter-cyclical to the volatility of home countries. Trade openness is the single most important factor that determines both remittance inflows and outflows for the home and host countries, respectively.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 25675.
Date of creation: Aug 2010
Date of revision:
Remittance; volatility; international business cycle; dynamic panel data;
Other versions of this item:
- Cooray Arusha & Mallick Debdulal, 2013. "International business cycles and remittance flows," The B.E. Journal of Macroeconomics, De Gruyter, vol. 13(1), pages 33, September.
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- F24 - International Economics - - International Factor Movements and International Business - - - Remittances
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-23 (All new papers)
- NEP-IFN-2010-10-23 (International Finance)
- NEP-OPM-2010-10-23 (Open Economy Macroeconomics)
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