IDEAS home Printed from https://ideas.repec.org/a/eee/asieco/v98y2025ics1049007825000302.html
   My bibliography  Save this article

How is remittance related to prices and output? New evidence from Fiji’s data

Author

Listed:
  • Narayan, Paresh Kumar
  • Narayan, Seema
  • Prasad, Biman
  • Manoa, Savaira

Abstract

This article uses a dynamic macroeconomic model to analyze how remittances affect Fijian prices and output. We find that remittance growth enhances price factor growth and decreases inflation using time-series data. Remittance increase also hurts output factor growth, which has major economic effects. Due to Fiji's particular reliance on remittances, single-country analysis is needed to explain macroeconomic dynamics. We integrate remittances into a business cycle framework and simulate their effects on prices and output to add to the research and inform fiscal and monetary policy in remittance-dependent nations.

Suggested Citation

  • Narayan, Paresh Kumar & Narayan, Seema & Prasad, Biman & Manoa, Savaira, 2025. "How is remittance related to prices and output? New evidence from Fiji’s data," Journal of Asian Economics, Elsevier, vol. 98(C).
    • Handle: RePEc:eee:asieco:v:98:y:2025:i:c:s1049007825000302
    DOI: 10.1016/j.asieco.2025.101906
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1049007825000302
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.asieco.2025.101906?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Batu, Michael, 2017. "International worker remittances and economic growth in a Real Business Cycle framework," Structural Change and Economic Dynamics, Elsevier, vol. 40(C), pages 81-91.
    2. Biman Prasad & Paresh K. Narayan & Joel Abraham, 2023. "How Effective Are Price Regulator’S Price Control Measures?," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 26(4), pages 563-570, November.
    3. Paresh Kumar Narayan & Seema Narayan & Sagarika Mishra, 2011. "Do Remittances Induce Inflation? Fresh Evidence from Developing Countries," Southern Economic Journal, John Wiley & Sons, vol. 77(4), pages 914-933, April.
    4. Giuliano, Paola & Ruiz-Arranz, Marta, 2009. "Remittances, financial development, and growth," Journal of Development Economics, Elsevier, vol. 90(1), pages 144-152, September.
    5. Termos, Ali & Naufal, George & Genc, Ismail, 2013. "Remittance outflows and inflation: The case of the GCC countries," Economics Letters, Elsevier, vol. 120(1), pages 45-47.
    6. Cazachevici, Alina & Havranek, Tomas & Horvath, Roman, 2020. "Remittances and economic growth: A meta-analysis," World Development, Elsevier, vol. 134(C).
    7. Lim, Sokchea & Basnet, Hem C., 2017. "International Migration, Workers’ Remittances and Permanent Income Hypothesis," World Development, Elsevier, vol. 96(C), pages 438-450.
    8. Abdih, Yasser & Chami, Ralph & Dagher, Jihad & Montiel, Peter, 2012. "Remittances and Institutions: Are Remittances a Curse?," World Development, Elsevier, vol. 40(4), pages 657-666.
    9. Jushan Bai & Pierre Perron, 1998. "Estimating and Testing Linear Models with Multiple Structural Changes," Econometrica, Econometric Society, vol. 66(1), pages 47-78, January.
    10. Lim, Sokchea & Simmons, Walter O., 2015. "Do remittances promote economic growth in the Caribbean Community and Common Market?," Journal of Economics and Business, Elsevier, vol. 77(C), pages 42-59.
    11. Dennis W. Jansen & Diego E. Vacaflores, 2020. "Remittances, Output, and Exchange Rate Regimes: Theory with an Application to Latin America," Southern Economic Journal, John Wiley & Sons, vol. 86(3), pages 1170-1191, January.
    12. Michael Sarel, 1996. "Nonlinear Effects of Inflation on Economic Growth," IMF Staff Papers, Palgrave Macmillan, vol. 43(1), pages 199-215, March.
    13. Paresh Kumar Narayan & Seema Narayan & Sagarika Mishra, 2011. "Do Remittances Induce Inflation? Fresh Evidence from Developing Countries," Southern Economic Journal, John Wiley & Sons, vol. 77(4), pages 914-933, April.
    14. Joel Abraham & Prof. Paresh K. Narayan, 2023. "How Are Fuel Prices Linked To Fiji’S Macroeconomy?," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 26(3), pages 437-444, September.
    15. Lartey, Emmanuel K.K., 2016. "A Note On Remittances, Monetary Regimes, And Nontradable Inflation Dynamics," Macroeconomic Dynamics, Cambridge University Press, vol. 20(6), pages 1668-1682, September.
    16. Adams, Samuel & Klobodu, Edem Kwame Mensah, 2016. "Remittances, regime durability and economic growth in Sub-Saharan Africa (SSA)," Economic Analysis and Policy, Elsevier, vol. 50(C), pages 1-8.
    17. Adams Jr., Richard H. & Cuecuecha, Alfredo, 2010. "Remittances, Household Expenditure and Investment in Guatemala," World Development, Elsevier, vol. 38(11), pages 1626-1641, November.
    18. Christopher P. Ball & Claude Lopez & Javier Reyes, 2013. "Remittances, Inflation and Exchange Rate Regimes in Small Open Economies," The World Economy, Wiley Blackwell, vol. 36(4), pages 487-507, April.
    19. Roy, Ripon & Rahman, Md. Mokhlesur, 2014. "An empirical analysis of remittance – inflation relationship in Bangladesh: post-floating exchange rate scenario," MPRA Paper 55190, University Library of Munich, Germany.
    20. Sobiech, Izabela, 2019. "Remittances, finance and growth: Does financial development foster the impact of remittances on economic growth?," World Development, Elsevier, vol. 113(C), pages 44-59.
    21. Attfield, C. L. F. & Demery, D. & Duck, N. W., 1981. "A quarterly model of unanticipated monetary growth, output and the price level in the U.K. 1963-1978," Journal of Monetary Economics, Elsevier, vol. 8(3), pages 331-350.
    22. Paresh Kumar Narayan & Seema Narayan & Sagarika Mishra, 2011. "Do Remittances Induce Inflation? Fresh Evidence from Developing Countries," Southern Economic Journal, Southern Economic Association, vol. 77(4), pages 914-933, April.
    23. Kangni Kpodar & Montfort Mlachila & Saad Quayyum & Vigninou Gammadigbe, 2023. "Defying the Odds: Remittances during the COVID-19 Pandemic," Journal of Development Studies, Taylor & Francis Journals, vol. 59(5), pages 673-690, May.
    24. 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.
    25. Attfield, C. L. F. & Demery, D. & Duck, N. W., 1981. "Unanticipated monetary growth, output and the price level: U.K. 1946-1977," European Economic Review, Elsevier, vol. 16(2), pages 367-385.
    26. Osili, Una Okonkwo, 2007. "Remittances and savings from international migration: Theory and evidence using a matched sample," Journal of Development Economics, Elsevier, vol. 83(2), pages 446-465, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dennis W. Jansen & Diego E. Vacaflores, 2020. "Remittances, Output, and Exchange Rate Regimes: Theory with an Application to Latin America," Southern Economic Journal, John Wiley & Sons, vol. 86(3), pages 1170-1191, January.
    2. Barajas, Adolfo & Chami, Ralph & Ebeke, Christian & Oeking, Anne, 2018. "What's different about monetary policy transmission in remittance-dependent countries?," Journal of Development Economics, Elsevier, vol. 134(C), pages 272-288.
    3. Ait Benhamou, Zouhair & Cassin, Lesly, 2021. "The impact of remittances on savings, capital and economic growth in small emerging countries," Economic Modelling, Elsevier, vol. 94(C), pages 789-803.
    4. Ma, Yechi & Chen, Zhiguo & Shinwari, Riazullah & Khan, Zeeshan, 2021. "Financialization, globalization, and Dutch disease: Is Dutch disease exist for resources rich countries?," Resources Policy, Elsevier, vol. 72(C).
    5. Al-Abri, Almukhtar & Genc, Ismail H. & Naufal, George S, 2018. "The Impact of Government Spending on GDP in a Remitting Country," IZA Discussion Papers 11676, Institute of Labor Economics (IZA).
    6. Sena Kimm Gnangnon, 2019. "Remittances Inflows and Trade Policy," Remittances Review, Remittances Review, vol. 4(2), pages 117-142, October.
    7. Alsamara, Mouyad, 2022. "Do labor remittance outflows retard economic growth in Qatar? Evidence from nonlinear cointegration," The Quarterly Review of Economics and Finance, Elsevier, vol. 83(C), pages 1-9.
    8. Lim, Sokchea & Morshed, A.K.M. Mahbub & Turnovsky, Stephen J., 2023. "Endogenous labor migration and remittances: Macroeconomic and welfare consequences," Journal of Development Economics, Elsevier, vol. 163(C).
    9. Destrée, Nicolas & Gente, Karine & Nourry, Carine, 2021. "Migration, remittances and accumulation of human capital with endogenous debt constraints," Mathematical Social Sciences, Elsevier, vol. 112(C), pages 38-60.
    10. Jamiu Adetola Odugbesan & Tomiwa Adebayo Sunday & Gbolahan Olowu, 2021. "Asymmetric effect of financial development and remittance on economic growth in MINT economies: an application of panel NARDL," Future Business Journal, Springer, vol. 7(1), pages 1-9, December.
    11. Imen Mohamed Sghaier, 2022. "Foreign Capital Inflows and Economic Growth in North African Countries: the Role of Human Capital," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(4), pages 2804-2821, December.
    12. Giulia Bettin & Andrea F. Presbitero & Nikola L. Spatafora, 2017. "Remittances and Vulnerability in Developing Countries," The World Bank Economic Review, World Bank, vol. 31(1), pages 1-23.
    13. Thanh Dinh Su & Canh Phuc Nguyen, 2022. "Foreign financial flows, human capital and economic growth in African developing countries," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(3), pages 3010-3031, July.
    14. Vacaflores, Diego E., 2018. "Are remittances helping lower poverty and inequality levels in Latin America?," The Quarterly Review of Economics and Finance, Elsevier, vol. 68(C), pages 254-265.
    15. Ben Atta, Oussama & Mughal, Mazhar Yasin & Rey, Serge, 2025. "Migrant remittances and real exchange rate dynamics in developing countries: Evidence of a U-shaped relationship," Economic Modelling, Elsevier, vol. 148(C).
    16. Irfan Ahmad Shah, 2024. "The effect of remittances on the Indian economy," International Economics and Economic Policy, Springer, vol. 21(4), pages 771-785, October.
    17. Waliu O. Shittu & Gazi M. Hassan & Frank G. Scrimgeour, 2023. "COVID-19 and the Role of Remittances on Sustainable Development: Insights from Sub-Saharan Africa," Working Papers in Economics 23/05, University of Waikato.
    18. Boburmirzo Ibrokhimov & Rashid Javed & Mazhar Mughal, 2023. "Migrants remittances and fertility in the Post-Soviet states," Post-Communist Economies, Taylor & Francis Journals, vol. 35(6), pages 574-596, August.
    19. Haruna, Issahaku, 2019. "Harnessing international remittances for financial development: The role of monetary policy," MPRA Paper 97004, University Library of Munich, Germany, revised 30 Jul 2019.
    20. Kim, Jounghyeon, 2021. "Financial development and remittances: The role of institutional quality in developing countries," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 386-407.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:asieco:v:98:y:2025:i:c:s1049007825000302. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/asieco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.