Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
989289 | World Development | 2009 | 18 Pages |
Abstract
SummaryThis paper tests whether the large, cheap, stable, and low-cyclical flows of workers’ remittances reduce the probability of current account reversals in recipient countries. Using a large panel of emerging and developing economies, we find that this is indeed the case: when remittances get above 3% of GDP, the relationship between a decreasing stock of international reserves and a higher probability of current account reversals becomes less stringent. IV estimation proves that the effect of remittances on current account reversals is of a causal nature.
Keywords
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Economics and Econometrics
Authors
Matteo Bugamelli, Francesco Paternò,