We investigate whether remittances sent to Turkey by Turkish workers living in Germany are countercyclical or procyclical with Turkish and German national outputs and discuss the possible reasons underlying the resulting patterns and their implications. We also take up a previously unexplored issue and discuss poverty alleviation potential of remittances at a macroeconomic level by examining the statistical properties of any co-movements between remittances cycles and cycles in consumption spending on food and durable goods in Turkey. Our results reveal that the real remittance flows from Germany to Turkey move procyclically with the real output in Turkey, and are primarily driven by (largely independent of) the developments in the Turkish economy (German economy). We also find that remittances cycles remain procyclical to the consumption cycles throughout our sample period. This direct co-movement between the two cycles becomes synchronous, however, only after a phase shift occurring around 1992, pointing to the increasing role of the level of economic activity in Turkey as the leading determinant of remittance receipts from Germany and the declining strength of consumption smoothing motive over time. Our results all together point out a low potential for remittances sent from Germany to reduce poverty in Turkey, at least as far as the past fifteen years are concerned.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
6029.
Find related papers by JEL classification: F22 - International Economics - - International Factor Movements and International Business - - - International Migration E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty F24 - International Economics - - International Factor Movements and International Business - - - Remittances
This paper has been announced in the following NEP Reports:
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.: