Cyclical Properties of Migrant's Remittances to Pakistan: What the data tell us
Migrant's remittances are a growing source of foreign funds for several developing countries including Pakistan. Despite a burgeoning body of literature and growing interest in migrants' remittances and its impact on recipient's economies, relatively little work exists on the business cycle characteristics of remittances to Pakistan. This study analyzes whether remittance act pro- or counter-cyclically in the face of external and internal economic shocks by employing annual data from 1973-2010 for Pakistan. The results show that migrant's remittances are counter-cyclical with respect to home output and households consumption. Remittances are found to be acyclical with the output of Pakistan's major remittances sources such as the United States and United Kingdom. Remittances from Saudi Arabia, however, show mixed results. The overall impact of remittance inflows to Pakistan appears to be a stabilizing one.
Volume (Year): 32 (2012)
Issue (Month): 4 ()
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