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Investigating the Business Cycle Properties of Remittances to the Caribbean

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  • Mahalia JACKMAN

Abstract

This paper investigates the business cycle properties of remittances to four Caribbean countries – Barbados, Dominica, Jamaica and Trinidad and Tobago. To extract the cyclical components, the study uses the structural time series framework proposed by Harvey (1989). Variance decompositions and impulse response functions are then employed to analyse the underlying relationships between the variables. Results suggest that remittances to Barbados and Jamaica are significantly influenced by their domestic business cycles. Meanwhile, remittances to both Dominica and Trinidad and Tobago seem to be more affected by the US business cycle than economic developments in Dominica or Trinidad and Tobago, respectively.

Suggested Citation

  • Mahalia JACKMAN, 2014. "Investigating the Business Cycle Properties of Remittances to the Caribbean," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 14(1), pages 87-100.
  • Handle: RePEc:eaa:aeinde:v:14:y:2014:i:1_7
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    File URL: http://www.usc.es/economet/reviews/aeid1417.pdf
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    References listed on IDEAS

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    1. Roberto Coronado, 2009. "Business cycles and remittances: can the Beveridge-Nelson decomposition provide new evidence?," Globalization Institute Working Papers 40, Federal Reserve Bank of Dallas, revised 2009.
    2. BORJA, Karla, 2013. "Home And Host Country Business Cycles And Remittances: The Case Of El Salvador And The Dominican Republic," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 13(2), pages 101-118.
    3. Poonam Gupta, 2005. "Macroeconomic Determinants of Remittances; Evidence from India," IMF Working Papers 05/224, International Monetary Fund.
    4. Adams, Richard Jr. & Page, John, 2005. "Do international migration and remittances reduce poverty in developing countries?," World Development, Elsevier, vol. 33(10), pages 1645-1669, October.
    5. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    6. Vargas-Silva, Carlos, 2008. "Are remittances manna from heaven? A look at the business cycle properties of remittances," The North American Journal of Economics and Finance, Elsevier, vol. 19(3), pages 290-303, December.
    7. Amuedo-Dorantes, Catalina & Pozo, Susan, 2004. "Workers' Remittances and the Real Exchange Rate: A Paradox of Gifts," World Development, Elsevier, vol. 32(8), pages 1407-1417, August.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Remittances; Caribbean; Business cycles.;

    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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