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International Business Cycles and Remittance Flows

Listed author(s):
  • Mallick, Debdulal
  • Cooray, Arusha

In this paper, we investigate the macroeconomic determinants and the effect of host country business cycles on remittance inflows. Estimating a dynamic panel data model by the system GMM, we document that remittance inflows are pro-cyclical to home country volatility but counter-cyclical to the volatility in host countries. This result does not hold for high income counties for which remittance inflows are acyclical to home country volatility but pro-cyclical to the volatility in host countries. For a host country, remittance outflows are counter-cyclical to the volatility of home countries. Trade openness is the single most important factor that determines both remittance inflows and outflows for the home and host countries, respectively.

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File URL: https://mpra.ub.uni-muenchen.de/25675/1/MPRA_paper_25675.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 25675.

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Date of creation: Aug 2010
Handle: RePEc:pra:mprapa:25675
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