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Ralph Chami: Avoiding the Remittance Trap

August 30, 2018

Beirut, Lebanon. While remittances have helped the Lebanese economy absorb shocks, there is no evidence that they have served as an engine of growth. (iStock by Getty images/ramzihachicho)

Few would argue that workers’ remittances—the money migrants send to family in their home country—improve the lives of millions of people. Remittances amounted to over $400 billion last year. That’s somewhere between official development assistance and foreign direct investment in terms of size. These massive financial flows have important consequences for the economies that receive them. But in this podcast, IMF economist Ralph Chami says remittances can also have a negative impact on growth. Chami is coauthor, with Ekkehard Ernst, Connel Fullenkamp, and Anne Oeking, of Is There a Remittance Trap featured in the September 2018 edition of Finance and Development Magazine.

Ralph Chami, is an assistant director in the IMF’s Institute for Capacity Development.