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Do Workers'Remittances Promote Economic Growth in Pakistan?

Author

Listed:
  • Sarmad Ellahi

    (State Bank of Pakistan)

  • Muhammad Omer

    (State Bank of Pakistan)

Abstract

This study investigates the role of workers’ remittances in promoting economic growth in Pakistan by using data from 1976-2017. We used GMM estimation to obtain the efficient estimates in the presence of endogeniety and simultaneity biases. Our estimates show that the increase in remittances inflows positively affects the economic growth of Pakistan. This impact is primarily through consumption channel, while investment channel is not found significant. However, in the long run, consumption growth may stimulate investment.

Suggested Citation

  • Sarmad Ellahi & Muhammad Omer, 2021. "Do Workers'Remittances Promote Economic Growth in Pakistan?," SBP Working Paper Series 106, State Bank of Pakistan, Research Department.
    • Handle: RePEc:sbp:wpaper:106
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    File URL: https://www.sbp.org.pk/publications/wpapers/2021/wp106.pdf
    File Function: First version, 2021
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    More about this item

    Keywords

    Workers’ Remittances; GMM; Economic Growth1;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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