The impacts of international migrants’ remittances on household consumption volatility in developing countries

Mondal, Ripon Kumar; Khanam, Rasheda

doi:10.1016/j.eap.2018.07.001

Cited by 28 publications

(27 citation statements)

References 49 publications

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“…Apart from single country studies, a few scholars have examined the relationship between workers' remittances and consumption expenditure based on panel data. Bilal et al (2015) examine the nexus between workers' remittances and consumption expenditure using the annual time series data collected from five South Asian countries namely India, Pakistan, Bangladesh, Nepal and Sri Lanka over the period of 1975-2010. This study employs the panel GMM and finds that workers' remittances increase consumption expenditure.…”

Section: Literature Reviewmentioning

confidence: 99%

The inter-temporal relationship between workers' remittances and consumption expenditure in Sri Lanka

Aslam¹,

Sivarajasingham

2020

JEAS

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PurposeThe objective of this study is to examine the inter-temporal relationship between workers' remittances and consumption expenditure in Sri Lanka over the period of 1975–2017 using the annual time series data.Design/methodology/approachTo test the order of integration of the variables used in this study, the augmented Dickey–Fuller (ADF) and Phillips and Perron (PP) unit root tests were employed. The autoregressive distributed lag (ARDL) bounds cointegration technique was used to examine the long-run relationship between the variables. The Granger causality test was used to examine the causal relationship between the variables.FindingsThe unit root tests confirm that the variables are stationary at 1st difference I(1). Meanwhile, the ARDL test results show that workers' remittances have a positive long-run relationship with consumption expenditure in Sri Lanka. The coefficient of the error correction term indicates that 9.3% of disequilibrium error is adjusted each year and the response variable of the consumption expenditure moves towards the long-run equilibrium path. Further, the results of the Granger causality test indicate that workers' remittances Granger cause consumption expenditure in the short-run.Practical implicationsThe findings have some important policy implications for the design of efficient policy related to workers' remittances and consumption expenditure pattern, the knowledge of which will help promote the macroeconomic stability and welfare of people in Sri Lanka.Originality/valueThis study contributes to the existing literature by using newly developed ARDL bounds cointegration techniques to investigate the inter-temporal relationship between workers' remittances and consumption expenditure in Sri Lanka. Furthermore, to our knowledge, this study is the first research in examining the inter-temporal relationship between workers' remittances and consumption expenditure in Sri Lanka.

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Section: Literature Reviewmentioning

confidence: 99%

The inter-temporal relationship between workers' remittances and consumption expenditure in Sri Lanka

Aslam¹,

Sivarajasingham

2020

JEAS

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“…Following Mondal and Khanam (2018), Arezki et al (2014), and Aghion et al (2009) this study uses standard deviation as a measure of the volatility of commodity price. The advantage of this method is its simplicity: it does not depend on the unit of measurement.…”

Section: Data and Description Of The Variablesmentioning

confidence: 99%

Commodity Price Volatility, Fiscal Balance and Real Interest Rate

2020

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The objective of this study is to explore the impact of commodity price volatility on the governments' fiscal balance. Using a dynamic panel data model for 108 countries from 1993 to 2018, this study finds that governments' fiscal balance deteriorates with commodity price volatility. A one standard deviation increase in commodity price volatility leads to a reduction of approximately 0.04 units in the fiscal balance as a percentage of gross domestic product. In addition, we examine the role of real interest rates in influencing the relationship between commodity price volatility and fiscal balance. The empirical results suggest that the negative impact of commodity price volatility on fiscal balance can be mitigated with lower real interest rate.

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“…Remittances and their impact on economic development are worth studying, both at the macroeconomic level and at the household level. The beneficiaries of remittances are, at the microeconomic level, for the families remaining in the country [22,23] and, at the macroeconomic level, the effects of remittances that are manifested on inflation, exports and imports by increasing domestic consumption and supporting the balance of payments [24]. The activity carried out by immigrants has positive effects for both the receiving state (as a result of the incomes and production achieved) and for the country of origin (through remittances and repatriation of the know-how accumulated by the migrant labor force in the host countries).…”

Section: Literature Reviewmentioning

confidence: 99%

Remittances, Migration and Gross Domestic Product from Romania’s Perspective

2019

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This study analyzes the evolution and trends of the share of remittances in gross domestic product (GDP) and the influence of migration on remittances in Romania. The analysis on data from Eurostat over 2008–2017 has three components: a statistical analysis, an estimation of evolution of indicators, and an estimation of impact of migration on remittances, using polynomial-time regression and difference equation models, respectively. The results showed that GDP and GDP/capita had a permanent increase, meaning an improvement in the standard of living in Romania, while the other indicators had an evolution with a period of sharp decline triggered by the global crisis, followed by a slow growth. We may conclude that the remittances represented and still represent a relatively stable financial resource for Romania as for the other emerging countries in Europe, affecting in a positive way the standard of living of the citizens, although their value has a tendency to decrease. At the same time, the negative effects of remittances, dependence on money received from migrants and the exodus of “brains” and skilled workers, must be considered, implying the necessity of government policies for a better use of remittances, i.e., mainly for investments and less for consumption.

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The impacts of international migrants’ remittances on household consumption volatility in developing countries

Cited by 28 publications

References 49 publications

The inter-temporal relationship between workers' remittances and consumption expenditure in Sri Lanka

The inter-temporal relationship between workers' remittances and consumption expenditure in Sri Lanka

Commodity Price Volatility, Fiscal Balance and Real Interest Rate

Remittances, Migration and Gross Domestic Product from Romania’s Perspective

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