Determinants of Remittances: Evidence From tonga

January 1, 2011

Preview Citation

Format: Chicago

Huidan Huidan Lin. Determinants of Remittances: Evidence From tonga, (USA: International Monetary Fund, 2011) 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 analyzes the determinants of remittances to Tonga. The results indicate that macroeconomic conditions in remitting countries and exchange rate fluctuations influence remittances. In particular, remittances growth falls when the Tongan currency appreciates, but increases with higher real GDP growth and lower unemployment in remitting countries. The analysis also finds that the influence of these determinants varies with the recipients of remittances, with remittances to non-profit organizations being more sensitive to an appreciation of the Tongan currency and the interest rate differential between Tonga and remitting countries than remittances to households. However, the analysis does not find evidence of "Dutch Disease" in Tonga, as the real exchange rate does not appear to be affected by remittances.

Subject: Balance of payments, Currencies, Foreign exchange, Labor, Money, Real effective exchange rates, Real exchange rates, Remittances, Unemployment rate

Keywords: Currencies, Exchange rate, Global, Pacific Islands, Real effective exchange rates, Real exchange rates, Remittance, Remittance behavior, Remittance flow, Remittance inflow, Remittances, Remittances growth, Remittances to Tonga, Tonga, Unemployment rate, WP

Publication Details

Pages:

17
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2011/018
Stock No:

WPIEA2011018
ISBN:

9781455211975
ISSN:

1018-5941

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