The Macroeconomic Consequences of Remittances
By Dennis W. Jansen, Diego E. Vacaflores, G. Naufal. 2012
410 citations recorded by the source corpus.
This study examines the impact of a remittances shock on the main macroeconomic aggregates of a small open economy. It uses a stochastic limited participation model to generate dynamics that are consistent with the empirical literature, like the increase in inflation, consumption, and leisure. However, the remittances shock generates a prolonged decline in GDP, which only diminishes when remittances are a larger percentage of GDP, the fraction of remittances directed towards investment increases, or when the fraction of labor income that remittances represent is reduced and is overturned when the persistence of the remittances shocks is shortened.
Subfields: Economics and Econometrics, Sociology and Political Science
View Paper: https://www.semanticscholar.org/paper/ad454c6b494b0b87e17b7a1076f95b54d9eaf995
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Citations in the corpus
- Remittances and financial development in Sub-Saharan African countries: A system approach (2015, background): “Among the studies, Chami et al. (2003) were the firsts to investigate the impact of remittances on economic growth. Based on the idea that remittances take place under asymmetric information and are likely to generate moral hazard problems (labor-supply decisions of individuals receiving remittances”
- Impact of remittances on household income, asset and human capital: evidence from Sri Lanka (2012, background): “It can potentially lead to unproductive dependency on transfer income, laziness and conspicuous consumption owing to a moral hazard problem (Chami et al., 2008).”