Workers' Remittances: An Overlooked Channel of International Business Cycle Transmission?

26 Pages Posted: 7 Nov 2012

See all articles by Adolfo Barajas

Adolfo Barajas

International Monetary Fund (IMF) - Western Hemisphere Department

Ralph Chami

International Monetary Fund (IMF)

Christian Ebeke

Centre d’Etudes et de Recherches sur le Développement International, CERDI-CNRS

Sampawende Tapsoba

International Monetary Fund (IMF)

Date Written: October 2012

Abstract

This paper shows that remittance flows significantly increase the business cycle synchronization between remittance-recipient countries and the rest of the world. Using both aggregate and bilateral remittances data in a panel data setting, the study demonstrates that this effect is robust and causal. Moreover, the econometric analysis reveals that 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.

Keywords: Workers remittances, Business cycles, Terms of trade, Capital inflows, Remittances, Business Cycle Synchronization, Trade, Spillovers., remittance, remittances, business cycle, business cycle synchronization, remittance flows, remittance inflows, business cycles, real gdp, migration, bilateral remittance, impact of remittances, effect of remittance, migrant, effect of remittances, impact of remittance, remittance channel, workers ? remittances, economic growth, bilateral remittances, remittance outflows, gdp growth, determinants of remittances, remittance data, growth rate, remittance sending, immigrant remittance, remittances data, role of remittance, variation in remittances, remittance se

JEL Classification: E32, F15, F24, F36, F41

Suggested Citation

Barajas, Adolfo and Chami, Ralph and Ebeke, Christian and Tapsoba, Sampawende, Workers' Remittances: An Overlooked Channel of International Business Cycle Transmission? (October 2012). IMF Working Paper No. 12/251. Available at SSRN: https://ssrn.com/abstract=2172191

Adolfo Barajas (Contact Author)

International Monetary Fund (IMF) - Western Hemisphere Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-4152 (Phone)
202-623-6070 (Fax)

Ralph Chami

International Monetary Fund (IMF) ( email )

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

Christian Ebeke

Centre d’Etudes et de Recherches sur le Développement International, CERDI-CNRS ( email )

65 Boulevard Francois Mitterrand
63000 Clermont-Ferrand Cedex 1
France

Sampawende Tapsoba

International Monetary Fund (IMF) ( email )

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

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