Remittance Flows and Economic Growth in Mexico: A Single Break Unit Root and Cointegration Analysis, 1970-2009
This paper gives an overview of remittance flows to Mexico during the 1980-2009 period in absolute terms, relative to GDP, in comparison to FDI inflows, and in terms of their regional destination. Next, the paper reviews the growing literature that assesses the impact of remittances on investment spending and economic growth. Third, it develops a simple endogenous growth model that explicitly incorporates the potential impact of remittance flows on economic and labor productivity growth. Fourth it presents an empirical counterpart to the conceptual model and, using single-break unit root and cointegration analysis, proceeds to determine the impact of changes in these flows on economic growth and labor productivity growth over the 1970-2009 period. The error-correction model estimates suggest that remittance flows to Mexico, along with other relevant variables, have a positive and significant effect on both economic growth and labor productivity growth. The concluding section summarizes the major results and discusses potential avenues for future research on this important topic.
|Date of creation:||Jul 2011|
|Date of revision:|
|Contact details of provider:|| Postal: 300 Summit Street, Hartford, CT 06106-3100|
Phone: (860) 297 - 2485
Web page: http://www.trincoll.edu/Academics/MajorsAndMinors/Economics/Pages/default.aspx
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Perron, Pierre, 1989.
"The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis,"
Econometric Society, vol. 57(6), pages 1361-1401, November.
- Perron, P, 1988. "The Great Crash, The Oil Price Shock And The Unit Root Hypothesis," Papers 338, Princeton, Department of Economics - Econometric Research Program.
- Samir Jahjah & Ralph Chami & Connel Fullenkamp, 2003.
"Are Immigrant Remittance Flows a Source of Capital for Development?,"
IMF Working Papers
03/189, International Monetary Fund.
- 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.
- M. Ramírez, 2000. "Foreign Direct Investment in Mexico: A Cointegration Analysis," Journal of Development Studies, Taylor & Francis Journals, vol. 37(1), pages 138-162, October.
- Miguel D. Ramirez & Hari Sharma, 2009.
"Remittances and Growth in Latin America: A Panel Unit Root and Panel Cointegration Analysis,"
Estudios Economicos de Desarrollo Internacional,
Euro-American Association of Economic Development, vol. 9(1).
- Ramirez, Miguel D. & Sharma, Hari, 2008. "Remittances and Growth in Latin America: A Panel Unit Root and Panel Cointegration Analysis," Working Papers 51, Yale University, Department of Economics.
- Jesus Canas & Roberto Coronado & Pia M. Orrenius, 2007. "Explaining the increase in remittances to Mexico," Southwest Economy, Federal Reserve Bank of Dallas, issue Jul, pages 3-7.
- Sen, Amit, 2003. "On Unit-Root Tests When the Alternative Is a Trend-Break Stationary Process," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(1), pages 174-84, January.
- Yingqi A. Wei & V. N. Balasubramanyam (ed.), 2004. "Foreign Direct Investment," Books, Edward Elgar Publishing, number 3169.
- David Alan Aschauer, 1989. "Public investment and productivity growth in the Group of Seven," Economic Perspectives, Federal Reserve Bank of Chicago, issue Sep, pages 17-25.
- Marta Ruiz-Arranz & Paola Giuliano, 2005.
"Remittances, Financial Development, and Growth,"
IMF Working Papers
05/234, International Monetary Fund.
- Ananth Ramanarayanan, 2009. "Ties that bind: bilateral trade's role in synchronizing business cycles," Economic Letter, Federal Reserve Bank of Dallas, vol. 4(jan).
- Waheed, Muhammad & Alam, Tasneem & Ghauri, Saghir Pervaiz, 2006. "Structural breaks and unit root: evidence from Pakistani macroeconomic time series," MPRA Paper 1797, University Library of Munich, Germany.
- Junsoo Lee & Mark C. Strazicich, 2003. "Minimum Lagrange Multiplier Unit Root Test with Two Structural Breaks," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 1082-1089, November.
- Gemechu Ayana Aga & Christian Eigen-Zucchi & Sonia Plaza & Ani Rudra Silwal, 2013. "Migration and Development Brief, No. 20," World Bank Other Operational Studies 17020, The World Bank.
- David A. Aschauer, 1989. "Back of the G-7 pack: public investment and productivity growth in the Group of Seven," Working Paper Series, Macroeconomic Issues 89-13, Federal Reserve Bank of Chicago.
When requesting a correction, please mention this item's handle: RePEc:tri:wpaper:1106. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joshua Stillwagon)
If references are entirely missing, you can add them using this form.