A Fantastic Rain of Gold: European Migrants’ Remittances and Balance of Payments Adjustment During the Gold Standard Period

Esteves, Rui; Khoudour-Castéras, David

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A Fantastic Rain of Gold: European Migrants’ Remittances and Balance of Payments Adjustment During the Gold Standard Period

The Journal of Economic History, Vol. 69, pp. 951-985, 2009

36 Pages Posted: 18 Mar 2012

See all articles by Rui Esteves

Rui Esteves

Graduate Institute of International and Development Studies (IHEID)

David Khoudour-Castéras

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII); Organization for Economic Co-Operation and Development (OECD) - Development Centre (DEV)

Date Written: 2009

Abstract

While the pre-1914 mass migrations have been widely studied, the related pattern of emigrants’ remittances is still largely untouched. This paper aims at filling this gap by analyzing the contribution of remittances to financial stability. In the optimum currency area theory labor mobility can ease the adjustment mechanism for countries under fixed exchange rate regimes. We confirm this claim by showing that emigrants’ remittances reduced the incidence of financial disturbances among a sample of emerging economies characterized by substantial emigration. This result underscores the benefits for emerging economies from opening up to international factor flows, despite the associated financial turbulence.

Keywords: International Migration, Remittances, Gold Standard, International Adjustment

JEL Classification: F24, F32, N13

Suggested Citation: Suggested Citation

Esteves, Rui and Khoudour-Castéras, David, A Fantastic Rain of Gold: European Migrants’ Remittances and Balance of Payments Adjustment During the Gold Standard Period (2009). The Journal of Economic History, Vol. 69, pp. 951-985, 2009, Available at SSRN: https://ssrn.com/abstract=2025025