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Remittances at record highs in Latin America: Time to revisit the Dutch disease

Arnoldo López-Marmolejo (), Carlos Vladimir Rodríguez-Caballero () and Daniel Ventosa-Santaulà ria ()
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Arnoldo López-Marmolejo: Inter-American Development Bank
Carlos Vladimir Rodríguez-Caballero: ITAM and Creates
Daniel Ventosa-Santaulà ria: CIDE

Authors registered in the RePEc Author Service: Carlos Vladimir Rodríguez Caballero, Daniel Ventosa-Santaulària and Arnoldo López Marmolejo

Economics Bulletin, 2021, vol. 41, issue 3, 2133-2146

Abstract: With remittances reaching historic highs in many Latin American countries, this paper evaluates the existence of Dutch disease in that region on a country-by-country basis. To do so, we employ heterogeneous panel data models with cross-sectional dependence to estimate the determinants of the real exchange rate and calculate the effect of net remittance flows in the region by country. In this context, various countries' future economic development must address this potential loss of competitiveness.

Keywords: Remittances; exchange rate; Dutch disease; Latin America (search for similar items in EconPapers)
JEL-codes: E4 F2 (search for similar items in EconPapers)
Date: 2021-09-18
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