Fiscal Sustainability in Remittance-Dependent Economies

26 Pages Posted: 21 Sep 2009

See all articles by Michael Gapen

Michael Gapen

International Monetary Fund (IMF) - International Capital Markets Department

Yasser Abdih

International Monetary Fund (IMF)

Amine Mati

International Monetary Fund (IMF)

Ralph Chami

International Monetary Fund (IMF)

Date Written: September 2009

Abstract

We investigate the impact of remittances on public debt sustainability and detail how the traditional debt-to-GDP ratio can be modified to create a more accurate representation of debt sustainability for a country that receives significant remittance inflows. The main result is that inclusion of remittances into the traditional debt sustainability analysis alters the amount of fiscal adjustment required to place debt on a sustainable path. While preliminary, these results are indicative of how a one-size-fits-all stability analysis may be inappropriate when evaluating the stance of fiscal policy for countries with different balance of payments characteristics.

Keywords: Capital inflows, Debt burden, Debt sustainability, Demand for money, Developing countries, Economic models, Fiscal management, Fiscal sustainability, Gross domestic product, Lebanon, Private savings, Public debt, Workers remittances

Suggested Citation

Gapen, Michael and Abdih, Yasser and Mati, Amine and Chami, Ralph, Fiscal Sustainability in Remittance-Dependent Economies (September 2009). IMF Working Papers, Vol. , pp. 1-25, 2009. Available at SSRN: https://ssrn.com/abstract=1475520

Michael Gapen (Contact Author)

International Monetary Fund (IMF) - International Capital Markets Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Yasser Abdih

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Amine Mati

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Ralph Chami

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-6039 (Phone)
202-623-6068 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
79
Abstract Views
476
rank
312,124
PlumX Metrics