The present study re-examines the effects of remittances on growth of GDP per capita using annual panel data for 24 Asia and Pacific countries. The results generally confirm that remittance flows have been beneficial to economic growth. However, our analysis also shows that the volatility of capital inflows such as remittances and FDI is harmful to economic growth. This means that, while remittances contribute to better economic performance, they are also a source of output shocks. Finally, remittances contribute to poverty reduction -especially through their direct effects. Migration and remittances are thus potentially a valuable complement to broad-based development efforts.

The objective of this paper is to explore the effects of crises and openness on a large sample of African countries. Focusing on sudden stops, currency, twin and sovereign debt crises, the paper shows that crises are associated with growth collapses in Africa. In contrast, openness is found to be beneficial to growth. More specifically, consistent with standard Mundell-Flemming type models, greater openness to trade and financial flows is found to mitigate the adverse effects of crises. These findings are robust to various measures of both openness and crises as well as to endogeneity concerns.

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This paper extends a two-period Overlapping Generations model of endogenous growth where the interactions between public infrastructure and human capital with R&D activities, and growth are studied. The paper makes two important contributions. First, it accounts for the spillover e¤ect of the stock of ideas on learning which in turn promotes the production of innovative technologies. In doing so, it brings to the fore a two-way interaction between human capital and innovation. The paper then applies various econometric methods, which con…rm the above theoretical thesis. Second, the solutions of the model emphasise the important role public spending on infrastructure, human capital and R&D can play in promoting economic growth. However, the …ndings also show that trade-o¤s in the allocation of public spending may inevitably emerge. In particular, investment in public infrastructure at the expense of spending on R&D is less likely to succeed in promoting economic growth, whereas it may be more e¤ective to foster growth through an o¤setting cut in another productive component, namely, education. In light of these potential trade-o¤s, governments in low-income countries need to use their limited budgets as part of holistic measures in order to achieve e¢ cient outcomes.

Remittance flows have become a vital source of foreign exchange for many developing countries. As a result, the issue of whether they act as complements or substitutes for domestic investment remains an important avenue of research. We know that remittances can act as compensatory transfers, in which case altruistic motives may dominate. We also know that they can act as standard capital flows, where self-interest/ investment motivates may dominate. Hence, the motives behind remittance flows can have a direct bearing on how they influence domestic capital formation. In addition, the short-run relationship between domestic investment and remittances may be different from their long-run relationship. In light of these considerations, this paper reexamines whether migrant remittances "crowd in" or "crowd out" investment in developing countries, using a sample of 47 developing and emerging economies. The paper employs recently developed panel cointegration techniques given that these can overcome a number of important issues. First, we explicitly account for cross-sectional dependence, outliers as well as crosssectional heterogeneity. Second, since our variables of interest may be influenced by various factors emanating from, for example, domestic policy changes or global economic trends, we account for structural breaks and regime shifts. Third, the approaches we employ are robust to endogeneity and many forms of omitted variable bias. Fourth, we examine both the long-run as well as the short-run relationship between remittance flows and domestic investment, employing panel error correction model to uncover the short-run dynamics. Finally, we conduct a panel Granger causality analysis to establish whether these relationships are indeed of a causal nature. The results of the paper show that remittances form a long-run equilibrium relation with domestic investment. The results of the panel vector error correction model reveal the absence of a short-run relationship but the presence of a long-run bidirectional link between remittances and investment. Thus, remittances drive investment while investment itself causes more remittances, suggesting that remittances are not only driven by altruistic motives but also investment motives. This long-run (causal) two-way relationship is robust to a battery of sensitivity analyses. However, when the sample is disaggregated into regions, the results of the Asian sub-sample are statistically insignificant. We suspect that this is due to the low number of observations from that region. An important policy implication emanating from this study is that developing countries should improve the effectiveness of remittance inflows given that these can augment the rate of capital accumulation.