The Impact of Remittances on the Real Exchange Rate: Evidence from Haiti

Carl-Henri Prophète () and Dudley Augustin ()
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Carl-Henri Prophète: Central Bank of Haiti (BRH)
Dudley Augustin: Central Bank of Haiti (BRH)

Chapter Chapter 8 in Contemporary Issues Within Caribbean Economies, 2022, pp 167-189 from Springer

Abstract: Abstract Migrant workers’ remittances to Haiti have been steadily increasing in the last 30 years and currently amount to around a quarter of the country’s GDP. This trend has turned Haiti into one of the most remittances’ dependent economies in the world, with potentially significant effects on its external competitiveness. Using an Error Correction Model approach, this chapter investigates the relationship between the increasing flow of remittances and the country’s real exchange rate. The results presented in this chapter suggest that the influx of workers’ remittances contributes significantly to the appreciation of Haiti’s real exchange rate in the long run, while that relationship is not significant in the short run. To conclude, the causality of the relationship as well as the policy implications of the results are discussed.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-98865-4_8

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DOI: 10.1007/978-3-030-98865-4_8

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