Remittances and the real effective exchange rates in MENA countries: What is the long run impact?
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.
|Date of creation:||Aug 2017|
|Contact details of provider:|| Postal: 99, avenue Jean-Baptiste Clément, 93430 Villetaneuse|
Phone: 33 (0)1 49 40 33 18
Fax: 01 49 40 33 34
Web page: https://cepn.univ-paris13.fr/
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.:
- Carlos Vargas-Silva, 2009.
"The Tale of Three Amigos: Remittances, Exchange Rates, and Money Demand in Mexico,"
Review of Development Economics,
Wiley Blackwell, vol. 13(1), pages 1-14, February.
- Carlos Vargas-Silva, 2007. "The Tale of Three Amigos: Remittances, Exchange Rates and Money Demand in Mexico," Working Papers 0704, Sam Houston State University, Department of Economics and International Business.
- Pablo A. Acosta & Nicole Rae Baerg & Federico S. Mandelman, 2009. "Financial development, remittances, and real exchange rate appreciation," Economic Review, Federal Reserve Bank of Atlanta, pages 1-12.
- Arvind Subramanian & Raghuram Rajan, 2005. "What Undermines Aid’s Impact on Growth?," IMF Working Papers 05/126, International Monetary Fund.
- Nyoni, Timothy S., 1998. "Foreign Aid and Economic Performance in Tanzania," World Development, Elsevier, vol. 26(7), pages 1235-1240, July.
- 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.
- Mohsin S. Khan & Axel Schimmelpfennig, 2006.
"Inflation in Pakistan: Money or Wheat?,"
SBP Research Bulletin,
State Bank of Pakistan, Research Department, vol. 2, pages 213-234..
- Mohsin S. Khan & Axel Schimmelpfennig, 2006. "Inflation in Pakistan; Money or Wheat?," IMF Working Papers 06/60, International Monetary Fund.
- M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
- Pesaran, M.H., 2003. "A Simple Panel Unit Root Test in the Presence of Cross Section Dependence," Cambridge Working Papers in Economics 0346, Faculty of Economics, University of Cambridge.
- Gianluca Benigno & Christoph Thoenissen, 2003. "Equilibrium Exchange Rates and Supply-Side Performance," Economic Journal, Royal Economic Society, vol. 113(486), pages 103-124, March.
- Benigno, Gianluca & Christoph Thoenissen, 2002. "Equilibrium Exchange Rates and Supply Side Performance," Royal Economic Society Annual Conference 2002 19, Royal Economic Society.
- Gianluca Benigno & Christoph Thoenissen, 2002. "Equilibrium exchange rates and supply-side performance," Bank of England working papers 156, Bank of England.
- Zulfiqar Hyder & Adil Mahboob, 2006. "Equilibrium Real Effective Exchange Rate and Exchange Rate Misalignment in Pakistan," SBP Research Bulletin, State Bank of Pakistan, Research Department, vol. 2, pages 237-263..
- Martin Petri & Tahsin Saadi-Sedik, 2006. "To Smooth or Not to Smooth—The Impact of Grants and Remittances on the Equilibrium Real Exchange Rate in Jordan," IMF Working Papers 06/257, International Monetary Fund.
- Oluremi Ogun, 1998. "Real exchange rate movements and export growth: Nigeria, 1960—1990," Research Papers RP_82, African Economic Research Consortium.
- Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
- Pasaran, M.H. & Im, K.S. & Shin, Y., 1995. "Testing for Unit Roots in Heterogeneous Panels," Cambridge Working Papers in Economics 9526, Faculty of Economics, University of Cambridge.
- Tom Doan, "undated". "IPSHIN: RATS procedure to implement Im, Pesaran and Shin panel unit root test," Statistical Software Components RTS00098, Boston College Department of Economics.
- repec:cup:apsrev:v:104:y:2010:i:02:p:307-323_00 is not listed on IDEAS
- Ilene Grabel, 2008. "The Political Economy of Remittances: What Do We Know? What Do We Need to Know?," Working Papers wp184, Political Economy Research Institute, University of Massachusetts at Amherst.
- Bazoumana Ouattara & Eric Strobl, 2008. "Foreign Aid Inflows And The Real Exchange Rate In The Cfa Franc Zone," Economie Internationale, CEPII research center, issue 116, pages 37-52.
- Ogun, O., 1998. "Real Exchange Rate Movements and Export Growth: Nigeria, 1960-1990," Papers 82, African Economic Research Consortium.
- Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-848, December.
- Lopez, Humberto & Molina, Luis & Bussolo, Maurizio, 2007. "Remittances and the real exchange rate," Policy Research Working Paper Series 4213, The World Bank. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:upn:wpaper:2017-15. 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: (Pascal Seppecher)
If references are entirely missing, you can add them using this form.