Remittance Flows and U.S. Monetary Policy

Immaculate Machasio () and Peter Tillmann ()
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Immaculate Machasio: World Bank
Peter Tillmann: University of Giessen

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: Remittance inflows are driven by macroeconomic conditions in the home and the host economies, respectively. In this paper, we study the effect of U.S. 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 U.S. 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)
Pages: 18 pages
Date: 2021
New Economics Papers: this item is included in nep-ban, nep-cba, nep-fdg, nep-mac, nep-mon and nep-opm
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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:202140

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