IMF Working Papers

Workers’ Remittances: An Overlooked Channel of International Business Cycle Transmission?

By Adolfo Barajas, Ralph Chami, Christian H Ebeke, Sampawende J Tapsoba

October 19, 2012

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Adolfo Barajas, Ralph Chami, Christian H Ebeke, and Sampawende J Tapsoba. Workers’ Remittances: An Overlooked Channel of International Business Cycle Transmission?, (USA: International Monetary Fund, 2012) accessed November 23, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper shows that remittance flows significantly increase the business cycle synchronization between remittance-recipient countries and the rest of the world. Using both aggregate and bilateral remittances data in a panel data setting, the study demonstrates that this effect is robust and causal. Moreover, the econometric analysis reveals that remittance flows are more effective in channeling economic downturns than upswings from the sending countries to remittance-receiving economies. The analysis suggests that measures of openness and spillovers could be enhanced by accounting for the role of the remittances channel.

Subject: Balance of payments, Business cycles, Economic growth, Foreign direct investment, International trade, Remittances, Terms of trade

Keywords: Business Cycle Synchronization, Business cycles, Foreign direct investment, Global, Remittance flow, Remittance inflow, Remittance ratio, Remittances, Sending country, Spillovers, Terms of trade, Trade, WP

Publication Details

  • Pages:

    25

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2012/251

  • Stock No:

    WPIEA2012251

  • ISBN:

    9781475535822

  • ISSN:

    1018-5941

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