Remittance flows and US monetary policy

Immaculate Machasio () and Peter Tillmann ()
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Immaculate Machasio: The World Bank Group
Peter Tillmann: Justus Liebig University Giessen

Review of World Economics (Weltwirtschaftliches Archiv), 2023, vol. 159, issue 3, No 1, 545-561

Abstract: Abstract Remittance inflows are driven by macroeconomic conditions in the home and the host economies, respectively. In this paper, we study the effect of US monetary policy on remittance flows into economies in Latin American and the Caribbean. The role of Fed policy for remittances has not yet been studied. We estimate a series of panel local projections for remittance inflows into eight countries. A surprise change in US monetary conditions has a strong and highly significant negative effect on inflows. Our finding remains robust if we change the sample period or include additional variables. Hence, our paper establishes a remittance-channel through which the Fed affects the business cycle abroad.

Keywords: Remittances; Migration; Business cycle; Monetary policy; Spillovers (search for similar items in EconPapers)
JEL-codes: E52 F24 F41 O11 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s10290-022-00478-x

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