Workers’ Remittances: An Overlooked Channel of International Business Cycle Transmission?
IMF Working Papers, October 19, 2012
Source details
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- Workers’ Remittances: An Overlooked Channel of International Business Cycle Transmission?
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Bibliographic details
- Authors: Adolfo Barajas, Ralph Chami, Christian H Ebeke, Sampawende J Tapsoba
- Published: October 19, 2012
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475535822.001
Key findings
- Remittance flows significantly increase the business cycle synchronization between remittance-recipient countries and the rest of the world.
- The effect is demonstrated using both aggregate and bilateral remittances data in a panel data setting.
- The study finds the remittances–synchronization effect is robust and causal.
- 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.
Methodology and scope
- Data and approach:
- Uses both aggregate and bilateral remittances data.
- Employs panel data econometric analysis.
- Robustness and causality:
- Results are described as robust and causal based on the econometric analysis.
Policy implications and suggestions
- Measures of openness and international spillovers should account for remittances as an important transmission channel.
- Recognition that remittances preferentially transmit downturns implies policymakers in recipient countries may need contingency measures for periods of external economic stress.
Content in this bundle
- _wp12251 - References