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Do Remittances to Latin America Depend on the U.S. Business Cycle?

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  • Ewa Gradzka
  • Shaun K. Roache

Abstract

We use a range of methods and remittance data from 1990 to 2007 to assess the strength and significance of linkages between remittance flows to Latin America and the U.S. business cycle. All of the evidence suggests that remittance flows are relatively insensitive to fluctuations in the U.S. cycle, underlining their role as a stable source of external financing, in good times and bad. A number of factors, notwithstanding uncertainties related to official remittance data reliability, might explain this result, including remittance smoothing and flexible immigrant labor markets.

Suggested Citation

  • Ewa Gradzka & Shaun K. Roache, 2007. "Do Remittances to Latin America Depend on the U.S. Business Cycle?," IMF Working Papers 07/273, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:07/273
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    Cited by:

    1. Bharati Basu & James T. Bang, 2013. "Insurance and remittances: New evidence from Latin American immigrants to the US," Migration Letters, Transnational Press London, UK, vol. 10(3), pages 383-398, September.
    2. 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.
    3. Magnusson, Kristin, 2009. "The Impact of U.S. Regional Business Cycles on Remittances to Latin America," SSE/EFI Working Paper Series in Economics and Finance 710, Stockholm School of Economics.
    4. Bank for International Settlements, 2008. "Monetary and financial stability implications of capital flows in Latin America and the Caribbean," BIS Papers, Bank for International Settlements, number 43, November.
    5. 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.
    6. repec:wsi:jicepx:v:03:y:2012:i:03:n:s1793993312500202 is not listed on IDEAS

    More about this item

    Keywords

    Business cycles; Latin America; Labor markets; Remittances; Workers remittances; remittance; remittance flows; correlations; cointegration;

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