The Macroeconomic Push-Pull Conditions Affecting Remittance Flows between Latin American Economies

Helena Glebocki (), Nicole Simpson () and Felipe Alarcon Vaca ()
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Helena Glebocki: Fairfield University
Nicole Simpson: Colgate University
Felipe Alarcon Vaca: Colgate University

No 18829, IZA Discussion Papers from IZA Network @ LISER

Abstract: This paper analyzes the macroeconomic push–pull determinants of bilateral remittance flows among 33 pairs of Latin American countries using quarterly data between 2005 and 2023. We apply a panel Autoregressive Distributed Lag (ARDL) framework combined with a Poisson Pseudo Maximum Likelihood (PPML) gravity model specification, distinguishing between short-run dynamics and long-run equilibrium relationships. The results show strong evidence of long-run cointegration between remittance flows and macroeconomic fundamentals. Among the determinants, GDP at origin emerges as the most important driver: stronger economic performance in the origin country is associated with significantly higher eemittance flows, suggesting that remittance-sending capacity increases during periods of economic expansion. GDP in the destination, or remittance-receiving, country is a critical driver of short-run remittance flows between countries. Inflation at origin leads to lower remittances flows in the long-run, but has no short-run impact. Overall, macroeconomic push–pull factors shape remittance corridors primarily through long-run structural channels rather than short-term cyclical fluctuations.

Keywords: remittances; emerging markets; international flows (search for similar items in EconPapers)
JEL-codes: F31 F42 F65 (search for similar items in EconPapers)
Date: 2026-07
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