Mallick, Debdulal and Cooray, Arusha (2010): International Business Cycles and Remittance Flows.
Download (248kB) | Preview
In this paper, we investigate the macroeconomic determinants and the effect of host country business cycles on remittance inflows. Estimating a dynamic panel data model by the system GMM, we document that remittance inflows are pro-cyclical to home country volatility but counter-cyclical to the volatility in host countries. This result does not hold for high income counties for which remittance inflows are acyclical to home country volatility but pro-cyclical to the volatility in host countries. For a host country, remittance outflows are counter-cyclical to the volatility of home countries. Trade openness is the single most important factor that determines both remittance inflows and outflows for the home and host countries, respectively.
|Item Type:||MPRA Paper|
|Original Title:||International Business Cycles and Remittance Flows|
|English Title:||International Business Cycles and Remittance Flows|
|Keywords:||Remittance, volatility, international business cycle, dynamic panel data|
|Subjects:||F - International Economics > F2 - International Factor Movements and International Business > F22 - International Migration
E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations; Cycles
C - Mathematical and Quantitative Methods > C2 - Single Equation Models; Single Variables > C23 - Models with Panel Data; Longitudinal Data; Spatial Time Series
F - International Economics > F2 - International Factor Movements and International Business > F24 - Remittances
|Depositing User:||Debdulal Mallick|
|Date Deposited:||09. Oct 2010 12:47|
|Last Modified:||17. Feb 2013 06:02|
Adams R., and Page J. (2003), “International Migration, Remittances and Poverty in Developing Countries,” World Bank Policy Research Paper 3179, Washington.
Agarwal R., and Horowitz, A. (2002), “Are International Remittances Altruism or Insurance? Evidence from Guyana Using Multiple-Migrant Households,” World Development, 30, 2033-2044.
Akkoyunlu S., and Kholodilin, K. (2008), “A Link between Workers’ Remittances and Business Cycles in Germany and Turkey,” Emerging Markets, Finance and Trade, 44, 23-40.
Arellano, M., and Bond, S. (1991), “Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,” Review of Economic Studies, 58, 277-297.
Arellano, M., and Bover, O. (1995), “Another Look at the Instrumental Variable Estimation of Error-components Models,” Journal of Econometrics, 68, 29-51.
Bangladesh Bank: http://www.bangladesh-bank.org/.
Beyer, Andreas, and Roger E. A. Farmer (2007), “Natural rate doubts,” Journal of Economic Dynamics and Control, 31, 797-825.
Blundell, R., and Bond, S. (1998), “Initial Conditions and Moment Restrictions in Dynamic Panel Data Models,” Journal of Econometrics, 87, 115-143.
Chami R., Hakura, D., and Montiel, P. (2009), “Remittances: An Automatic Output Stabilizer?” IMF Working Papers: 91/2009, International Monetary Fund.
Chinn, Menzie D., and Ito, Hiro (2008), “A New Measure of Financial Openness,” Journal of Comparative Policy Analysis, 10 (3, September), 309 – 322.
Cox D., Eser Z., and Jimenez, E. (1998), “Motives for Private Transfers over the Life Cycle: An Analytical Framework and Evidence for Peru,” Journal of Development Economics, 55, 57-80.
Giuliano P., and Ruiz-Arranz, M. (2009), “Remittances, Financial Development and Growth,” Journal of Development Economics, 90, 144-152.
Jackman M., Craigwell, R., and Moore W. (2009), “Economic Volatility and Remittances: Evidence from SIDS,” Journal of Economic Studies, 36, 135-146.
Kapur D. (2005), “Remittances: the New Development Mantra?” in S. Maimbo and D. Ratha (eds.) Remittance Development Impact and Future Prospects. World Bank, Washington.
Koustas, Zisimos, and Apostolos, Serletis (2003), “Long-run Phillips-type trade-offs in European Union Countries,” Economic Modelling, 20, 679-701.
Lucas R., and Stark, O. (1985), “Motivations to Remit: Evidence from Botswana,” Journal of Political Economy, 93, 901-918.
Mundaca B. G. (2009), “Remittances, Financial Market Development, and Economic Growth: The Case of Latin America and the Caribbean,” Review of Development Economics, 13, 288-2009.
Polity IV Project: Political Regime Characteristics and Transitions, 1800-2007, http://www.systemicpeace.org/polity/polity4.htm.
Ratha, Dilip, and Shaw, William (2007), “South-South Migration and Remittances,” Development Prospects Group, World Bank.
Roberts, K., and Morris, M. (2003) “Fortune, Risk and Remittances: An Application of Option Theory to Participation in Village-Based Migration Networks,” International Migration Review, 37, 1252-1281.
Sayan, S. (2004), “Guest Workers’ Remittances and Output Fluctuations in Host and Home Countries: The Case of Remittances from Turkish Workers in Germany,” Emerging Markets Finance and Trade, 40, 68-81.
Sayan S., and Tekin-Koru, A. (2008), “The Effects of Economic Developments and Policies in Host Countries on Workers’ Remittance Receipts of Developing Countries: The Cases of Turkey and Mexico Compared,” in R. Lucas, L. Squire and T. Srinivasan (eds.), The Impact of Rich Country Policies on Developing Economies. London: Edward Elgar.
Vargas-Silva, C. (2008), “Are Remittances Manna from Heaven? A Look at the Business Cycle Properties of Remittances,” North American Journal of Economics and Finance, 19, 290–303.
Windmeijer, F. (2005), “A Finite Sample Correction for the Variance of Linear two-Step GMM Estimators,” Journal of Econometrics, 126, 25–51.
World Bank (2009): http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTDECPROSPECTS/0,,contentMDK:21121930~menuPK:3145470~pagePK:64165401~piPK:64165026~theSitePK:476883,00.html