Determinants of Remittances : Evidence From tonga

Author/Editor: Hannah Huidan Lin
Publication Date: January 01, 2011
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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.
Series: Working Paper No. 11/18
Subject(s): Capital flows | Real effective exchange rates | Workers remittances

Author's Keyword(s): remittances | exchange rate
Publication Date: January 01, 2011
ISBN/ISSN: 9781455211975/1018-5941 Format: Paper
Stock No: WPIEA2011018 Pages: 17
US$18.00 (Academic Rate:
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