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Are remittances manna from heaven? A look at the business cycle properties of remittances


  • Vargas-Silva, Carlos


This article documents the business cycle properties of workers' remittance flows to Mexico. We also discuss key differences between the cyclical properties of remittance inflows and the cyclical properties of foreign direct investment (FDI). We find evidence that remittances are countercyclical with respect to Mexico's business cycle. However, this result is not robust to the use of different measures of remittances. The lack of a robust relationship between remittances and Mexico's business cycle suggests that the use of remittances to smooth cyclical fluctuations in output may not be a straightforward strategy.

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  • 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.
  • Handle: RePEc:eee:ecofin:v:19:y:2008:i:3:p:290-303

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    References listed on IDEAS

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    9. Carlos Vargas-Silva & Peng Huang, 2006. "Macroeconomic determinantsof workers' remittances: Hostversus home country's economic conditions," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 15(1), pages 81-99.
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    Cited by:

    1. Mthuli Ncube & Zuzana Brixiova, 2013. "Working Paper 188 - Remittances and their Macroeconomic Impact: Evidence from Africa," Working Paper Series 996, African Development Bank.
    2. Veronica Bayangos & Karel Jansen, 2010. "The Macroeconomics of Remittances in The Philippines," Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 28(61), pages 18-58.
    3. Farid Farid, 2014. "The impact of exchange rate policy on remittances in Morocco: A Threshold VAR analysis," Economics Bulletin, AccessEcon, vol. 34(4), pages 2351-2360.
    4. Farid MAKHLOUF, 2014. "Propriétés cycliques des transferts de fonds des migrants marocains," Working Papers 2013-2014_9, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Feb 2014.
    5. Mazhar Y. Mughal & Junaid Ahmed, 2014. "Remittances and Business Cycles: Comparison of South Asian Countries," International Economic Journal, Taylor & Francis Journals, vol. 28(4), pages 513-541, December.
    6. Giulia Bettin & Andrea F. Presbitero & Nikola L. Spatafora, 2017. "Remittances and Vulnerability in Developing Countries," World Bank Economic Review, World Bank Group, vol. 31(1), pages 1-23.
    7. Marjit, Sugata & Kar, Saibal & Hazari, Bharat R., 2013. "Emigration, unemployment and welfare – The role of non-traded sector," The North American Journal of Economics and Finance, Elsevier, vol. 24(C), pages 298-305.
    8. repec:taf:apeclt:v:23:y:2016:i:16:p:1177-1181 is not listed on IDEAS
    9. Timo Baas & Silvia Maja Melzer, 2012. "The Macroeconomic Impact of Remittances: A sending country perspective," Norface Discussion Paper Series 2012021, Norface Research Programme on Migration, Department of Economics, University College London.
    10. Hathroubi, Salem & Aloui, Chaker, 2016. "On interactions between remittance outflows and Saudi Arabian macroeconomy: New evidence from wavelets," Economic Modelling, Elsevier, vol. 59(C), pages 32-45.
    11. Ahmed, Junaid & Martinez-Zarzoso, Inmaculada, 2013. "Blessing or curse: The stabilizing role of remittances, foreign aid and FDI to Pakistan," Center for European, Governance and Economic Development Research Discussion Papers 153, University of Goettingen, Department of Economics.
    12. Gloria Clarissa O. Dzeha, 2016. "The decipher, theory or empirics: a review of remittance studies," African Journal of Accounting, Auditing and Finance, Inderscience Enterprises Ltd, vol. 5(2), pages 113-134.
    13. Cooray Arusha & Mallick Debdulal, 2013. "International business cycles and remittance flows," The B.E. Journal of Macroeconomics, De Gruyter, vol. 13(1), pages 1-33, September.
    14. 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.
    15. 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.
    16. Antje Hildebrandt & Isabella Moder, 2015. "Business cycle synchronization between the Western Balkans and the European Union," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 8-25.
    17. Junaid Ahmed, 2012. "Cyclical Properties of Migrant's Remittances to Pakistan: What the data tell us," Economics Bulletin, AccessEcon, vol. 32(4), pages 3266-3278.
    18. Marie Coiffard, 2010. "L'impact de la crise financière internationale sur les transferts des migrants : le cas des travailleurs tadjiks," Post-Print halshs-00504218, HAL.
    19. Díaz, Violeta & Soydemir, Gökçe, 2013. "Regional foreclosures and Mexican remittances: Evidence from the housing market crisis," The North American Journal of Economics and Finance, Elsevier, vol. 24(C), pages 74-86.
    20. Bayangos, V.B. & Jansen, K., 2009. "The Macroeconomics of Remittances In the Philippines," ISS Working Papers - General Series 19676, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    21. Serdar Sayan & B. Onur Tas & Yasemin Yalta, 2010. "Cyclical Behavior of Mexican Remittances over the Mexican and the US Business Cycles," Working Papers 1008, TOBB University of Economics and Technology, Department of Economics.
    22. Adolfo Barajas & Ralph Chami & Christian H Ebeke & Anne Oeking, 2016. "What’s Different about Monetary Policy Transmission in Remittance-Dependent Countries?," IMF Working Papers 16/44, International Monetary Fund.


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