Economic Misery and Remittances in Jamaica

Anupam Das, Leanora Brown and Adian Mcfarlane (amcfar22@uwo.ca)
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Anupam Das: Mount Royal University, Canada
Leanora Brown: University of Tennessee at Chattanooga, U.S.A
Adian Mcfarlane: King’s University College at Western University, Canada

Journal of Economic Development, 2023, vol. 48, issue 2, 33-52

Abstract: Jamaica is noted for having high remittance inflows (remittances) and economic misery, the latter often measured as a function of inflation and unemployment. We examine the relationship between economic misery and remittances in Jamaica from 1985 to 2019. To measure economic misery, we use the Okun and Hanke misery indices. We arrive at two key findings after applying vector error correction modelling, Granger causality testing, and controlling for potentially confounding factors. First, we find cointegration between remittances and our measures of economic misery. Second, there is bidirectional Granger causality between remittances and economic misery. One implication of our finding is that Jamaican policymakers could reduce economic misery through policies to increase remittance flows, such as providing more incentives for migrants to remit.

Keywords: Remittances; Okun Misery Index; Hanke Misery Index; Jamaica; Cointegration (search for similar items in EconPapers)
JEL-codes: C22 E24 E31 F24 (search for similar items in EconPapers)
Date: 2023
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