Economic policy uncertainty and remittances: mediating role of foreign exchange rate

Waqas Bin Khidmat (), Nayar Rafique () and Muhammad Umar
Additional contact information
Waqas Bin Khidmat: Air University Islamabad, Aerospace and Aviation Campus Kamra
Nayar Rafique: Air University Islamabad, Aerospace and Aviation Campus Kamra

Economic Change and Restructuring, 2024, vol. 57, issue 4, No 7, 30 pages

Abstract: Abstract Recent studies provide evidence that economic policy uncertainty (EPU) is linked with the workers' remittances, yet the channel through which EPU affects the workers' remittances has been less explored. To understand the above said channel, this study uses monthly data from Pakistan, which ranges from January 2015 to November 2022. Based on the results obtained by using different econometric techniques, this study provides evidence that the foreign exchange rate mediates the relationship between EPU (both global and domestic) and workers' remittances. Additionally, it finds that the domestic EPU mediates the relationship between the global EPU and the exchange rate. Interestingly, the results highlight the limited influence of altruistic motives on remittances instead the findings suggest the prevalence of self-interest as the dominant driving factor behind workers’ remittances in the case of Pakistan. The findings of this study have implications for policymakers and stakeholders in formulating effective strategies to harness the potential of workers’ remittances for economic development and welfare enhancement in Pakistan.

Keywords: Economic Policy Uncertainty (EPU); Exchange rate; Remittances; Emerging economy (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10644-024-09725-7 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:ecopln:v:57:y:2024:i:4:d:10.1007_s10644-024-09725-7

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/10644/PS2

DOI: 10.1007/s10644-024-09725-7

Access Statistics for this article

Economic Change and Restructuring is currently edited by George Hondroyiannis

More articles in Economic Change and Restructuring from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().