What's Different About Monetary Policy Transmission in Remittance-Dependent Countries?

Barajas, Adolfo; Chami, Ralph; Ebeke, Christian; Oeking, Anne

doi:10.2139/ssrn.2760214

Cited by 5 publications

(8 citation statements)

References 8 publications

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“…By considering at the individual household level, Valatheeswaran and Khan () and Petreski et al () argue that remittance‐led investments in human capital (commonly in children's education and health) create a positive impact on economic growth in recipient countries, while spending on basic consumption generates better living standards of low‐income households in the long run. Some (Barajas et al, ; Sobiech, ), however, focusing on its macroeconomic effectiveness, conclude that remittances are “potential contributor to the ineffectiveness of monetary transmission” (Barajas et al, : 285). A recent study on Bangladesh highlights that remittances create a U‐shaped pattern economic growth, which is “negative initially but later becomes positive” (Hassan et al, : 105).…”

Section: Introductionmentioning

confidence: 99%

“…urban to rural) are internal remittances while remittances received from overseas are international remittances. International remittances have become the largest form of foreign exchange earnings for developing countries at US$596 billion in 2017 (World Bank, ) and “the average worker's remittances‐GDP ratio for all developing countries over the period 1980–2012 is 1.29%, compared to 1.95% for foreign direct investment, 1.68% for other private capital flows, and 0.80% for official transfers” (Barajas et al, : 272). Remittances cross regions but the South Asian region claims nearly 25% of total remittances globally (World Bank, ).…”

Section: Introductionmentioning

confidence: 99%

“…Remittances, cash or goods received by household members from absent members of the household, are the most common, stable, non‐market personal transfers based on familial relationships across countries (Barajas et al, ) due to large‐scale global labour mobility. There are two types of remittances: internal and international.…”

Section: Introductionmentioning

confidence: 99%

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Where do Remittances Go in Household Consumption? Empirical Evidence from Sri Lanka‐Wide Micro‐data

Samaratunge

Kumara

Abeysekera

2020

International Migration

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Private internal and international remittances are a major source of household money in Sri Lanka, yet their impact on household welfare has long been a research gap. Based on the Migration and Development Theory, this article examines how private remittances affect household expenditure behaviour, using nationally representative microdata and applying quasi-experimental methods. Private remittances have significantly increased household percapita expenditure and initiated positive behavioural changes via increased allocations for basic needs, human and physical capital investment. Compared with internal remittances, the impact of international remittance shows a strong potential for reducing poverty incidence and improving people's well-being: households in richer/richest expenditure quartiles and urban households invest in education, which supports the country's long-standing record of education. Rural households demonstrate favourable changes in spending behaviour with receiving private remittances. From a public policy standpoint, government favours migration so that remittances are more likely to flow. A proper remittance-transfer mechanism to encourage smooth remittance is thus required.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Where do Remittances Go in Household Consumption? Empirical Evidence from Sri Lanka‐Wide Micro‐data

Samaratunge

Kumara

Abeysekera

2020

International Migration

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“…A vast literature argues that remittances grow the tax base, enlarge fiscal space, and improve debt sustainability, but at the same time discourage fiscal discipline, erode the quality of institutions, and increase business cycle volatility. Furthermore, remittance inflows may complicate monetary policy through several channels that seem also to be operative in Moldova (Barajas et al, 2018).…”

Section: Box 1 Remittances and Monetary Transmissionmentioning

confidence: 99%

Republic of Moldova: Selected Issues

2022

IMF Staff Country Reports

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“…Indeed, the literature indicates that remittance can lead to increasing demand for private credit (Fromentin and Leon, 2019). However, this does not happen automatically and factors such as market concentration among commercial banks and inconsistent monetary policy (Barajas et al, 2018) as well as the personal preference of remittance senders (Brown et al, 2013) often counteract overall strategies of FOR. This points to the contested nature of FOR.…”

Section: Financialization Of Remittancesmentioning

confidence: 99%

The financialization of remittances and the individualization of development: A new power geometry of global development

Warnecke-Berger

2021

Environ Plan A

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The article argues that the increasing financialization of remittances produces an enormous shift in the political economy of development and contributes to a new power geometry of development. Exploring this power geometry, the article focuses on three main issues: First, migrants intend to support their friends and families on an individual level as remittance senders, and together with the corresponding recipients they form a translocal moral economy. On a macro level, the value of these transactions is high when currency hierarchies remain strong. Financialization of remittances amplifies this micro–macro divergence inherent to remittance flows. Deepening the financial “development” impact of remittances then goes hand in hand with cementing global inequality. Second, economic and political elites in remittance-receiving societies who are able to organize direct and indirect access to remittances with the help of financial instruments and through financialization are able to emancipate from national political control. This indirectly contributes to fostering elite rule in remittance-receiving societies. Third and finally, development is no longer a “national” objective but has become the individual risk of migrants and their relatives and friends. Financialization of remittances therefore consolidates an individualized notion of development. This paper aims to go beyond the narrow economistic and problem-solving approach on which many studies on remittances and financial inclusion draw. It illustrates how financialization of remittances (re)shapes power relations both within the Global South and between the Global South and the Global North.

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What's Different About Monetary Policy Transmission in Remittance-Dependent Countries?

Cited by 5 publications

References 8 publications

Where do Remittances Go in Household Consumption? Empirical Evidence from Sri Lanka‐Wide Micro‐data

Where do Remittances Go in Household Consumption? Empirical Evidence from Sri Lanka‐Wide Micro‐data

Republic of Moldova: Selected Issues

The financialization of remittances and the individualization of development: A new power geometry of global development

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