Macroeconomic Determinants of Remittances: Evidence from India
IMF Working Papers, December 1, 2005
Source details
- Canonical URL
- Macroeconomic Determinants of Remittances: Evidence from India
Other formats
Bibliographic details
- Authors: Poonam Gupta
- Published: December 1, 2005
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451862430.001
Overview
- Remittances to India have been growing rapidly since 1991, making India one of the largest recipients of remittances.
- The paper analyzes determinants of remittances to India and attributes their growth over time primarily to increases in migration and total earnings of migrants.
- Remittances are affected by the economic environment in source countries and appear to be countercyclical—higher during periods of low economic growth in India.
- The paper finds that none of the remaining economic or political variables considered—including political uncertainty, interest rates, or exchange rate depreciation—affect remittances significantly.
Key Findings
- Primary drivers:
- Increase in migration.
- Increase in total earnings of migrants.
- Cyclicality:
- Remittances appear countercyclical: higher during periods of low economic growth in India.
- Non-significant factors:
- Political uncertainty.
- Interest rates.
- Exchange rate depreciation.
- Other economic or political variables tested in the paper.
Subject Areas and Keywords
- Subject: Capital account, Current account, Market exchange rates, Oil prices, Remittances
- Keywords: dependent variable, India, remittance, WP