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Do Emigrant¡¯s Remittances Cause ¡°Dutch Disease¡±? : The Case of Nepal and Bangladesh

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  • Hiroyuki Taguchi

    (Dept. of Japanese and Asian Studies, Saitama University, 255 Shimo-Okubo, Sakura-ku, Saitama 338-8570, Japan)

  • Bikram Lama

    (Dept. of Japanese and Asian Studies, Saitama University, 255 Shimo-Okubo, Sakura-ku, Saitama 338-8570, Japan)

Abstract

This paper examines the Dutch Disease effects of international migrant remittances by using a vector auto-regression estimation focusing on Nepal and Bangladesh. The reason for targeting two economies is that the differences in their economic performances could shed light on what kinds of mechanisms make the received remittances lead to or not to the Dutch Disease. The study identified the existence of the Dutch Disease in Nepal, but not in Bangladesh, judging from the causalities and dynamic responses from remittances to manufacturing-services ratio. We speculate that the contrast in the Dutch Disease effects might come from the differences in the demand structure and policy efforts for manufacturing development between both economies.

Suggested Citation

  • Hiroyuki Taguchi & Bikram Lama, 2016. "Do Emigrant¡¯s Remittances Cause ¡°Dutch Disease¡±? : The Case of Nepal and Bangladesh," Research in Applied Economics, Macrothink Institute, vol. 8(4), pages 1-15, December.
    • Handle: RePEc:mth:raee88:v:8:y:2016:i:4:p:1-15
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    References listed on IDEAS

    as
    1. Chowdhury, Mamta B., 2011. "Remittances flow and financial development in Bangladesh," Economic Modelling, Elsevier, vol. 28(6), pages 2600-2608.
    2. Ghada Fayad, 2011. "Remittances: Dutch disease or export-led growth?," OxCarre Working Papers 057, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    3. Görlich, Dennis & Omar Mahmoud, Toman & Trebesch, Christoph, 2007. "Explaining labour market inactivity in migrant-sending families: Housework, hammock, or higher education?," Kiel Working Papers 1391, Kiel Institute for the World Economy (IfW Kiel).
    4. Yves Bourdet & Hans Falck, 2006. "Emigrants' remittances and Dutch Disease in Cape Verde," International Economic Journal, Taylor & Francis Journals, vol. 20(3), pages 267-284.
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    Cited by:

    1. Amjad, Rashid, 2017. "Remittances and Poverty: A Comparison of Bangladesh and Pakistan, 2000–2016," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 40(3-4), pages 75-104, Sep-Dec.
    2. Abdulaziz Hamad Algaeed, 2017. "Oil Price Fluctuations and the Future of Saudi Arabian Non-Oil Traded Sector: An Empirical Investigation," Journal of Economics and Behavioral Studies, AMH International, vol. 9(4), pages 217-229.
    3. Khan, Adnan & Mrs, Sultana, 2021. "International Remittances Literature: A Study in Bangladesh during the period of 1971-2020," MPRA Paper 108290, University Library of Munich, Germany, revised 2021.

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