Economic growth and remittances in Tunisia: Bi-directional causal links

The paper seeks to investigate the causal links between economic growth and remittances for Tunisia over the period 1970-2010 through two specific transmission channels, namely financial development and investment. The analysis is based on the autoregressive distributed lag (ARDL) approach to cointegration proposed by Pesaran et al. ((2001). Journal of Applied Econometrics, 16, 289-326), which has the advantage to provide estimates with desirable properties and to make reliable conclusions. The results reveal cointegrated relationships among the variables, and show evidence of limited support over the long-run since most causal nexuses are unidirectional. By cons, over the short-run, there are significant bidirectional causal links among the variables, in particular between remittances and economic growth. Our findings are then of great interest and support the view that the causal links are relevant for economic policy makers.