Remittances over the business cycle: theory and evidence

Supriyo De, Ergys Islamaj, Ayhan Kose and S. Reza Yousefi

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: This paper examines the behavior of remittances over the business cycle and their potential to act as a stabilizer during periods of high business cycle volatility. Four main findings are reported. First, in theory, the cyclical behavior of remittances depends on the motives to remit. Second, remittances are less volatile than other foreign currency flows but do not appear to systemically co-move with business cycle fluctuations. Third, remittances are relatively stable even during episodes of sharp business cycle volatility, such as those associated with sudden stops and financial crises. Finally, remittances can help support consumption stability over the business cycle.

Keywords: Remittances; business cycles; acyclical; sudden stops; risk sharing (search for similar items in EconPapers)
JEL-codes: F24 F36 F41 F44 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2016-03
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
https://cama.crawford.anu.edu.au/sites/default/fil ... maj_kose_yousefi.pdf (application/pdf)

Related works:
Journal Article: Remittances over the business cycle: Theory and evidence (2019)
Working Paper: Remittances over the Business Cycle: Theory and Evidence (2019)
Working Paper: Remittances over the Business Cycle: Theory and Evidence (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2016-13

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