EconPapers    
Economics at your fingertips  
 

The Impact of Remittances on Exchange Rate and Money Supply: Does “Openness” Matter in Developing Countries?

Jounghyeon Kim

Emerging Markets Finance and Trade, 2019, vol. 55, issue 15, 3682-3707

Abstract: Using a perfect-foresight general equilibrium monetary model, this article explores the impact of migrants’ remittances on exchange rate and money supply in developing countries and the effect of their “openness” on the impact. The findings indicate that the inflow of remittances leads to appreciation of the nominal exchange rate and increase of money supply under the fixed exchange rate regime. Moreover, a greater degree of openness helps mitigate the appreciation. These findings suggest that remittances and the degree of openness play a significant role in complementing monetary and exchange rate policy, helping to boost economic development. Using a sample of 114 developing countries from 1970 to 2013, empirical tests with both Anderson-Hsiao with instrumental variables and system generalized method of moments’ estimations confirm the theoretical findings.

Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1080/1540496X.2018.1547963 (text/html)
Access to full text is restricted to subscribers.

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:mes:emfitr:v:55:y:2019:i:15:p:3682-3707

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MREE20

DOI: 10.1080/1540496X.2018.1547963

Access Statistics for this article

More articles in Emerging Markets Finance and Trade from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().

 
Page updated 2020-07-24
Handle: RePEc:mes:emfitr:v:55:y:2019:i:15:p:3682-3707