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Remittances and the real effective exchange rates in MENA countries: What is the long run impact?

Listed author(s):
  • Mariem Brahim

    ()

    (Centre d'Economie de l'Université de Paris Nord (CEPN))

  • Nader Nefzi

    ()

    (Centre d'Economie de l'Université de Paris Nord (CEPN))

  • Hamed Sambo

    ()

    (Centre d'Economie de l'Université de Paris Nord (CEPN))

The aim of this paper is to examine the effect of remittances on real effective exchange rate in MENA countries using an autoregressive distributive lag (ARDL) model and three estimators, namely the Pooled Mean Group estimator, the Mean Group estimator and the dynamics common correlated effects estimator. We use data from 9 countries of MENA region for the 1980-2015 period. On the long-run, we find that migrants’ remittances towards the whole MENA countries negatively and significantly affect the real effective exchange rate. Indeed, the increase in remittances leads to a depreciation of the real exchange rate, meaning that remittances do not deteriorate the price competitiveness of the recipient countries in the long-run. Therefore, remittances do not cause the Dutch disease’s risk in MENA countries.

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Paper provided by Centre d'Economie de l'Université de Paris Nord in its series CEPN Working Papers with number 2017-15.

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Date of creation: Aug 2017
Handle: RePEc:upn:wpaper:2017-15
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  15. Richard Adams, 2011. "Evaluating the Economic Impact of International Remittances On Developing Countries Using Household Surveys: A Literature Review," Journal of Development Studies, Taylor & Francis Journals, vol. 47(6), pages 809-828.
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