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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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File URL: http://www.sciencedirect.com/science/article/B6W5T-4S3S2MG-1/2/cc68afc16b306ec7dbc1f54dec57f205
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Article provided by Elsevier in its journal The North American Journal of Economics and Finance.

Volume (Year): 19 (2008)
Issue (Month): 3 (December)
Pages: 290-303

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Handle: RePEc:eee:ecofin:v:19:y:2008:i:3:p:290-303
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620163

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  1. Bruce A. Blonigen, 2005. "A Review of the Empirical Literature on FDI Determinants," NBER Working Papers 11299, National Bureau of Economic Research, Inc.
  2. Marianne Baxter & Robert G. King, 1995. "Measuring Business Cycles Approximate Band-Pass Filters for Economic Time Series," NBER Working Papers 5022, National Bureau of Economic Research, Inc.
  3. Carlos Vargas-Silva & Peng Huang, 2005. "Macroeconomic Determinants of Workers’ Remittances: Host vs. Home Country’s Economic Conditions," International Finance 0507007, EconWPA, revised 29 Jul 2005.
  4. Ewa Gradzka & Shaun K. Roache, 2007. "Do Remittances to Latin America Dependon the U.S. Business Cycle?," IMF Working Papers 07/273, International Monetary Fund.
  5. Ziesemer, Thomas, 2006. "Worker Remittances and Growth: The Physical and Human Capital Channels," MERIT Working Papers 020, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
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  7. José Ernesto López Córdova, 2006. "Globalization, Migration and Development: The Role of Mexican Migrant Remittances," IDB Publications (Working Papers) 9387, Inter-American Development Bank.
  8. Catalina Amuedo-Dorantes & Susan Pozo, 2006. "Migration, Remittances, and Male and Female Employment Patterns," American Economic Review, American Economic Association, vol. 96(2), pages 222-226, May.
  9. Hodrick, Robert J & Prescott, Edward C, 1997. "Postwar U.S. Business Cycles: An Empirical Investigation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(1), pages 1-16, February.
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  11. Catalina Amuedo-Dorantes & Susan Pozo, 2006. "Remittances as insurance: evidence from Mexican immigrants," Journal of Population Economics, Springer, vol. 19(2), pages 227-254, June.
  12. Michel A. Robe & Stephane Pallage, 2000. "Foreign Aid And The Business Cycle," Computing in Economics and Finance 2000 107, Society for Computational Economics.
  13. Borraz Fernando, 2005. "Assessing the Impact of Remittances on Schooling: the Mexican Experience," Global Economy Journal, De Gruyter, vol. 5(1), pages 1-32, April.
  14. de la Briere, Benedicte & Sadoulet, Elisabeth & de Janvry, Alain & Lambert, Sylvie, 2002. "The roles of destination, gender, and household composition in explaining remittances: an analysis for the Dominican Sierra," Journal of Development Economics, Elsevier, vol. 68(2), pages 309-328, August.
  15. Torres, Alberto & Vela, Oscar, 2003. "Trade integration and synchronization between the business cycles of Mexico and the United States," The North American Journal of Economics and Finance, Elsevier, vol. 14(3), pages 319-342, December.
  16. Stephane Pallage & Michel A. Robe, 2003. "On the Welfare Cost of Economic Fluctuations in Developing Countries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 677-698, 05.
  17. Chiquiar, Daniel & Ramos-Francia, Manuel, 2005. "Trade and business-cycle synchronization: evidence from Mexican and U.S. manufacturing industries," The North American Journal of Economics and Finance, Elsevier, vol. 16(2), pages 187-216, August.
  18. Agarwal, Reena & Horowitz, Andrew W., 2002. "Are International Remittances Altruism or Insurance? Evidence from Guyana Using Multiple-Migrant Households," World Development, Elsevier, vol. 30(11), pages 2033-2044, November.
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