Grants, Remittances, and the Equilibrium Real Exchange Rate in Sub-Saharan African Countries

April 1, 2009

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Joannes Mongardini, and Brett Rayner. Grants, Remittances, and the Equilibrium Real Exchange Rate in Sub-Saharan African Countries, (USA: International Monetary Fund, 2009) accessed December 26, 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 builds on the methodology developed by Chudik and Mongardini (2007) to estimate the relationship between grants and remittances and the equilibrium real exchange rate in Sub-Saharan African (SSA) countries using panel techniques. The results indicate that grants and remittances are not associated, in the long run, with an appreciation of the real effective exchange in SSA and are therefore not likely to give rise to Dutch disease effects. These findings suggest that grants and remittances may be serving to ease supply constraints or boost productivity in the non-tradable sector in the recipient economies.

Subject: Balance of payments, Foreign exchange, Real exchange rates, Remittances

Keywords: Africa, Equilibrium Real Exchange Rate, Exchange rate, Grant, Grant inflow, Grant spending, Grants, Official Development Assistance, Real exchange rates, Remittance spending, Remittances, Remittances to SSA country, Resource inflow, Sub-Saharan Africa, WP

Publication Details

Pages:

27
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2009/075
Stock No:

WPIEA2009075
ISBN:

9781451872224
ISSN:

1018-5941

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