Do Workers' Remittances Reduce the Probability of Current Account Reversals?

Matteo Bugamelli and Francesco Paternò

World Development, 2009, vol. 37, issue 12, 1821-1838

Abstract: Summary This 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: current; account; reversals; workers'; remittances; international; reserves (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (61)

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Related works:
Working Paper: Do Workers' Remittances Reduce the Probability of Current Account Reversals? (2006)
Working Paper: Do workers' remittances reduce the probability of current account reversals? (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:37:y:2009:i:12:p:1821-1838

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