Remittances have been rising fairly rapidly around the world and are the fastest growing source of foreign exchange earnings for developing countries. The empirical literature suggests that remittances can have both positive and negative influences on the growth and development of receiving states. However, the literature has been largely silent on the potential effects that these flows can have on economic volatility in the receiving country. This paper evaluates the impact of remittance flows on economic volatility in a panel of 95 countries over the period 1970 to 2005. The study reports that remittances can play a key role in mitigating the effect of adverse output shocks but exert no significant influence on consumption and investment volatility. Moreover, important differential impacts exist across the various county groupings.JEL Classification: F240; E320; P500
This paper uses support vector regressions (SVRs) and Google search data to test whether observing Internet habits can provide insights into trends in tourist arrivals in Barbados. The empirical evidence suggests that Google Trends data may be used to pick up changing patterns and trends in tourist arrivals from the UK and Canada. In the case of the USA, the authors find no evidence to suggest that Google data add any significant information to what can be ‘learned’ from an autoregressive SVR.
This paper argues that length of stay is a reflection of the distance between the origin and destination country. Past interpretations of distance premised on spatial aspects. This study extends the dimensional space of distance to include socio-psychological dimensions, climate distance and economic distance. Our empirical analysis utilizes airport data covering over 350,000 pleasure tourists to Barbados from 144 countries. The results suggest that the length of stay of pleasure tourists to Barbados increases with geographic distance, cultural distance and climatic distance, but is inversely related to economic distance. We find no evidence that long-distance relationships (captured by transnational and diasporic relationships) affect tourist length of stay. Implications of these findings are provided.
PurposeThe purpose of this paper is to investigate the potential link between remittances and economic volatility in small island developing states.Design/methodology/approachThe paper estimates a panel data model using a database containing 20 small island developing states (SIDS) observed over annual intervals between 1986 and 2005.FindingsThe results suggest that, in general, remittance flows have a stabilising influence on output and investment volatility. However, given the importance of these flows to SIDS, the volatility of remittances also has a significant and positive impact on both investment and consumption volatility.Practical implicationsThe policy implications of the study's findings is that SIDS (similar to how oil‐producing nations take oil price fluctuations into account when considering policy changes) may have to monitor and forecast future remittance flows and take these projections into account when making changes to either their monetary or fiscal policy stance.Originality/valueWorkers' remittances have grown dramatically worldwide, particularly in SIDS, where they constitute one of the main sources of foreign exchange. Given the importance of these flows to economic growth and development in these countries, this study examines the potential link between remittances and economic volatility.
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