Exchange Rate Flexibility and the Effect of Remittances on Economic Growth

Lartey, Emmanuel K. K.

doi:10.1111/rode.12256

Cited by 11 publications

(5 citation statements)

References 22 publications

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“…The findings determined that a bidirectional causality exists between exchange rate and remittances. Lartey (2017) studied the effect of remittances on GDP in 135 emerging and transition countries from 1970-2007. The results showed that a boost in economic growth and remittances is directly linked with a more flexible exchange rate.…”

Section: Literature Reviewmentioning

confidence: 99%

Remittances-Exchange Rate Nexus: Evidence from Pakistan

Munir

Riaz

2021

AAR

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The major goal of this study was to estimate the remittances-exchange rate nexus in Pakistan. For this purpose, it adopted a two-step procedure to examine the short-run and long-run nexus between exchange rate and remittances in Pakistan from January 1980 to April 2018. In the first step, an ARMA-GARCH model was utilized along with the generated conditional variance as the measure of the volatility of remittances and rate of exchange, respectively. In the second step, ARDL framework was utilized to check both the long- and short-run nexus between rate of exchange and inflation. The result revealed that past remittances and exchange rate affected current remittances and rate of exchange, significantly. Furthermore, it was also shown that exchange rate has a significant and positive effect on remittances and the volatility of rate of exchange has a significant and positive effect on exchange rate in the long-run. The test of causality showed that a bidirectional causality exists between remittances and the volatility of remittances, as well as between rate of exchange and the volatility of rate of exchange. Thus, it is suggested that the government needs to formulate policies to maintain the stability of exchange rate. Moreover, strong capital and financial markets are required to mitigate the risk of exchange rates.Keywords: exchange rate, remittances, volatility

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Section: Literature Reviewmentioning

confidence: 99%

Remittances-Exchange Rate Nexus: Evidence from Pakistan

Munir

Riaz

2021

AAR

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“…Migration of household members creates benefits and costs for those left behind, all of which could affect child human capital. Numerous studies find positive economic outcomes from such remittances, including increased demand for tradable goods and economic growth (Lartey, ; Lartey, ). At the microeconomic level, remittances can immediately reduce poverty and spur human capital accumulation.…”

Section: Past Findingsmentioning

confidence: 99%

The impact of foreign and domestic remittance types and senders on education outcomes

Stanley

Fleming

2019

Economic Notes

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Migration and remittances are very important for Nepal, yet the country continues to be plagued by low financial development. Increases in human capital investments, such as enrollment of school‐aged children, are a possible gain from the country's labor movements, which can be leveraged further through an understanding of the microeconomic processes involved. This study examines how remittances from both household and nonhousehold members affect school enrollment rates for children in Nepalese families. We analyze the positive and negative impacts of migration and remittances separately and consider both the type and location of the remittance sender using the Nepal Living Standards Survey (NLSS‐III) of 9,335 school‐aged children. We find enrollment more associated with an exogenous process and use this to estimate marginal effects in which remittances significantly increase children's school enrollment by about 2% points in most cases. These results suggest policymakers should encourage domestic migration (which allows proximity between senders and recipients of remittances as well as less family disruption).

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“…In addition to the above discussed papers on the relationship between remittances and exchange rates, many papers have expanded the scope of research to investigate the relationship between remittances and many economic variables. Many studies investigated the economic significance of workers remittances on economic growth in recipient countries (Yang, 2005;Adams and Richard, 2008;Singer, 2010;Lartey, 2016). Adams and Richard (2008) -addresses this question by using new data on such variables as the skill composition of migrants, poverty, and interest and exchange rates to examine the determinants of remittances.…”

Section: Literature Reviewmentioning

confidence: 99%

Remittances and Real Exchange Rates in South Asia: The Case of Nepal

Essayyad

Palamuleni

Satyal

2018

Asian Economic and Financial Review

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The significance of remittances in Nepal's economy warrants investigating their impact on its currency's exchange rate and other economic indicators. No academic research has documented this phenomenon in the case of Nepal. This paper attempts to bridge this literature gap by investigating the impact of economic variables including remittances on the foreign exchange rate of the Nepalese rupee. Autoregressive distributed lag (ARDL) of Pesaran et al. (2001) and Augmented-Dickey-Fuller (ADF) unit root tests are used to test for short-term and long-term co-integrations. Empirical results show that there is an evidence that increasing remittance inflows leads to currency depreciation in the short-run and currency appreciation in the in the long-run. However, the results are statistically significant only in the short-run. As for the other control variables, the net exports flows, was the only determinant of the real exchange rate that was statistically significant, implying that an increasing net exports leads to currency appreciation in the long-run. However, all determinants affects the exchange rates in the short-run. Contribution/ Originality: This paper attempts to investigate the impact of economic variables including remittances on the foreign exchange rate of the Nepalese rupee.

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Exchange Rate Flexibility and the Effect of Remittances on Economic Growth

Cited by 11 publications

References 22 publications

Remittances-Exchange Rate Nexus: Evidence from Pakistan

Remittances-Exchange Rate Nexus: Evidence from Pakistan

The impact of foreign and domestic remittance types and senders on education outcomes

Remittances and Real Exchange Rates in South Asia: The Case of Nepal

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