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The Responsiveness of Remittances to the Oil Price: The Case of the GCC

Author

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  • Naufal, George S

    () (Texas A&M University)

  • Termos, Ali

    () (American University of Beirut)

Abstract

We investigate the responsiveness of remittances from the Gulf Cooperation Council (GCC) countries to the changes in the price of crude oil. Most of the GCC countries rank in the top 20 remitting countries in the world. We find that oil price elasticity of remittances is around 0.4. While most studies have examined the impact of remittances on the real economic activities in the receiving countries, this study emphasises the impact of remittances on the remitting countries. We examine various policy implications with regard to macroeconomic shocks, monetary policy and fiscal policy of the GCC countries.

Suggested Citation

  • Naufal, George S & Termos, Ali, 2009. "The Responsiveness of Remittances to the Oil Price: The Case of the GCC," IZA Discussion Papers 4277, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4277
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    References listed on IDEAS

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    1. Ralph Chami & Connel Fullenkamp & Samir Jahjah, 2005. "Are Immigrant Remittance Flows a Source of Capital for Development?," IMF Staff Papers, Palgrave Macmillan, vol. 52(1), pages 55-81, April.
    2. Giuliano, Paola & Ruiz-Arranz, Marta, 2009. "Remittances, financial development, and growth," Journal of Development Economics, Elsevier, vol. 90(1), pages 144-152, September.
    3. 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.
    4. El-Sakka, M. I. T. & McNabb, Robert, 1999. "The Macroeconomic Determinants of Emigrant Remittances," World Development, Elsevier, vol. 27(8), pages 1493-1502, August.
    5. Alejandra Cox Edwards & Manuelita Ureta, 2003. "International Migration, Remittances, and Schooling: Evidence from El Salvador," NBER Working Papers 9766, National Bureau of Economic Research, Inc.
    6. Edwards, Alejandra Cox & Ureta, Manuelita, 2003. "International migration, remittances, and schooling: evidence from El Salvador," Journal of Development Economics, Elsevier, vol. 72(2), pages 429-461, December.
    7. 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.
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    Cited by:

    1. 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.
    2. Marzovilla, Olga, 2010. "Impact of global economic imbalance on migrant workers and economies of the Gulf Cooperation Council," MPRA Paper 24210, University Library of Munich, Germany.

    More about this item

    Keywords

    oil price; remittances; elasticity; GCC;

    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • P22 - Economic Systems - - Socialist Systems and Transition Economies - - - Prices
    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East

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