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The Importance Of Macroeconomic Conditions On Remittances In The Long-Run And In The Short-Run: The Case Of Mexico

Author

Listed:
  • Ramon A. CASTILLO-PONCE
  • Maria de Lourdes RODRIGUEZ-ESPINOSA
  • Erika GARCIA-MENESES

Abstract

In this document we evaluate how macroeconomic conditions influence the amount of remittances sent to Mexico from the United States in the long-run and in the short-run. Specifically, we perform cointegration tests to determine the existence and magnitude of common trends between remittances and variables believed to influence their dynamics; including employment in the host country, the real exchange rate, credit granted to the private sector and inflation in Mexico. In addition, common cycle tests are performed to identify common transitory movements among said variables. Our findings indicate that employment in the US, and credit and inflation in Mexico, significantly affect remittances in the long-run. The real exchange rate and remittances are found to be positively related in the long-run, but negatively associated in the short-run.

Suggested Citation

  • Ramon A. CASTILLO-PONCE & Maria de Lourdes RODRIGUEZ-ESPINOSA & Erika GARCIA-MENESES, 2011. "The Importance Of Macroeconomic Conditions On Remittances In The Long-Run And In The Short-Run: The Case Of Mexico," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 11(1).
    • Handle: RePEc:eaa:aeinde:v:11:y:2011:i:1_8
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    References listed on IDEAS

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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. 38. Selected Readings on World Development in journal AEID: America, 2001-2020
      by MCG Blogs de Economía in Euro-American Association: World Development on 2020-01-17 20:24:00

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    Cited by:

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    2. Adnan KHURSHID & Yin KEDONG & Adrian Cantemir CALIN & Oana Cristina POPOVICI, 2016. "Do Remittances Hurt Domestic Prices? New Evidence from Low, Lower-Middle and Middle–Income Groups," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 95-114, December.

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    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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