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Role of Remittances in Economic Development: An Empirical Study of World’s Two Most Remittances Dependent Pacific Island Economies

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  • Jayaraman, T. K.
  • Choong, Chee-Keong
  • Kumar, Ronald

Abstract

In the context of the ongoing world-wide recession and the consequent dim prospects for exports from small Pacific island countries, mobilization of foreign exchange earnings assumes considerable importance. The dependency of Samoa and Tonga on inward remittances is well known, as the two Polynesian island countries in recent years have been amongst the first top ten remittance recipient countries of the world. This paper examines the long-run nexus between economic growth and inward remittances during a three-decade period (1981-2008). The paper also discusses some important policy implications arising out of the study findings.

Suggested Citation

  • Jayaraman, T. K. & Choong, Chee-Keong & Kumar, Ronald, 2011. "Role of Remittances in Economic Development: An Empirical Study of World’s Two Most Remittances Dependent Pacific Island Economies," MPRA Paper 33197, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:33197
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    Cited by:

    1. Brito, Joao, 2015. "Country Size and Determinants of Economic Growth: A Survey with Special Interest on Small States," MPRA Paper 61273, University Library of Munich, Germany.

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    More about this item

    Keywords

    Remittances; financial sector development; economic growth; bounds test; Samoa; Tonga;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances

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