The Nexus between Remittances and Economic Growth: Empirical Evidence from Guyana

Bollers, Elton and Pile, Dennis (2015): The Nexus between Remittances and Economic Growth: Empirical Evidence from Guyana.

Abstract

Remittances to developing countries generally arrive in large volumes, and Guyana is no exception. One important policy concern is the impact of remittances on economic growth. This paper explores the empirical impact of remittances on economic growth in Guyana using time series data from 1993 to 2013. Recorded remittances inflow to Guyana in 2014 amounted to 329.7 million dollars (approximately 12% of GDP). The model used by Karagoz (2009) was adopted to conduct this study. The results indicate that remittances positively impact economic growth. It was also found that foreign direct investment positively impacts growth.

• Item Type: MPRA Paper
• Language: English
• Keywords: Guyana, Economic Growth, Remittances, Foreign Direct Investment.
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C13 - Estimation: General; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence

References

Acosta, P., C. Calderon, P Fajnzylber, and H. Lopez. "What is the Impact of International Migrant Remittances on Poverty and Inequaity in Latin America?" World Development36(1), 2008: 89-114.

Barajas, A., R. Chami, C. Fullenkamp, M. Gapen, and P. Montie. "Do Workers' Remittances Promote Economic Growth?" IMF WP/09/153 (Washington: International Monetary Fund)., 2009.

Catrinescu, N, Leon-Ledesma, M, M Piracha, and B Quilin. "International Migration as a Safety Net: The Case of Columbia." Mimeo, Banco de la Republica., 2009.

DaCosta, M. "Colonial Origins, Institutions and Economic Performance in the Caribbean: Guyana and Barbados." IMF Working Paper, 2007.

Engle, R. F., and C, W, J Granger. "Co-Integration and Error Correction: Representation, Estimation, and Testing." Econometrica, Vol. 55, No. 2. , 1987: 251 - 276.

Garcia-Fuentes, P.A, and P.L. Kennedy. "Remittances and Economic Growth in Latin America and the Caribbean: The Impact of Human Capital Development." Selected Paper prepared for presentation at the Southern Agricultural Economics Association Annual Meeting, Atlanta, Georgia., 2009.

George, D., and M. Mallery. Using SPSS for Windows step by step: a simple guide and reference. Boston, MA: Allyn & Bacon., 2010.

Ghosh, B. "Migrants Remittances and Development: Rhetoric and Realities." International Organization for Migration, 2006.

Giuliano, P, and M.R. Arranz. "Remittances, Financial Development, and Growth." Journal of Development Economics 90, 2009: 144-152.

Granger, C. W. J. "Some Properties of Time Series Data and Their Use in Econometric Model Specification." Journal of Econometrics, 1981: 121 - 130.

IDB and MIF. Sending Money Home: Leveraging the Development Impact of Remittances. Inter- American Development Bank and Multilateral Investment Fund, 2007.

IMF. 2013 Article IV Consultation - Staff Report; Press Release (IMF Country Report No. 14/294). International Monetary Fund, 2013.

IMF. "International Monetary Fund." World Economic Outlook: Global and External ImbalancesWashington , DC., 2005. Inter-American Development Bank. "“IDB Country Strategy with Guyana”,." 2008.

Islam, M. S., and S Nasrin. "Driving Forces of Remittance Inflow in Bangladesh: An Empirical Study." Chittagong University, Bangladesh and International Islamic University Chittagong, Bangladesh, 2012.

Julca, A. "Can remittances support development finance in developing Countries." World Economic and Social Survey, 2012.

Karagoz, K. "Workers' Remmittances and Economic Growth: Evidence from Trukey." Journal of Yasar University. 4(13), 2009: 895-912.

Mercier-Blackman, V, and M Melgarejo. Spillovers of Global Shocks Over Caribbean Counntries: So Large That There Is Little Room to Maneuver. Country Department Caribbean Group Policy Brief No. IDB-PB-206, Inter-American Development Bank, 2013.

Mouhoud, E. M., Joel, O Oudinet, and E Unan. "Macroeoconomic Dtereminants of Migrants' Remittances in the Southern and Eastern Mediterranean Countries." Working Paper CEPN, 2008.

Ncube, G, and G. M. Gómez. "Local economic development and migrant remittances in rural Zimbabwe: building on sand or solid ground?" Institute of Social Studies, Working Paper, 2011.

Pablo, F, and J. H. López. Remittances and Development Lessons from Latin America. The World Bank, 2008, 410.

Pasha, S, and K Grenade. "Accelerating Guyana's Growth Momentum." Developing Country Studies 9 (2): 1-11, 2012.

Ratha, D. "Leveraging Remittances for Development." Migration Policy Institute, 2007.

Ratha, D; Mohapatra, S. Increasing the Macroeconomic Impact of Remittances on Development. World Bank, 2007.

Roberts, D. "The Development Impact of Remittances on Caribbean Economies: The Case of Guyana." 2007.

Solomon, C. "Inflation in a Small Open Economy." Transition Journal, Issue 42. No. 1 (Transition ), 2013: 26-40.

Ukeje, E. U., and Emeka, M. Obiechina. "Workers' Remittances - Economic Growth Nexus: Evidence from Nigeria, Using an Error Correction Methodology." International Journal of Humanities aand Social Science. Volume 3 # 7, 2013: 212-227. UNCTAD. "Maximizing the Development Impact of Remittances." United Nations Conference on Trade and Development. United Nations, 2013. 181. USAID. "Guyana Economic Perfomance Assessment." United States Agency for International Development, 2007. World Bank. "Global Monitoring Report 2008: MDGs and Environment Agenda for Inclusive and Sustainable Development." World Bank, Washington DC., 2008. World Bank. Migration and Development Brief 24 . Migration and Remittances Team, Development Prospects Group, World Bank, 2015.