Publication

Remittances and the real effective exchange rate

Abstract
We examine the long-run relationship between remittances and the real exchange rate for less-developed countries. In a key departure from the literature, we employ a panel cointegration approach using an innovative method for the measurement of the multilateral real effective exchange rate and we focus on high-remittance economies. We find a small inelastic, but significant, long-run relationship which confirms a Dutch disease type effect. The short-run relationship is explored using a panel vector error correction model which confirms that short-run causality is unidirectional running from remittances to the exchange rate. Potential asymmetries in this relationship are identified using quantile regression analysis.
Type
Journal Article
Type of thesis
Series
Citation
Hassan, G. M., Holmes, M. J. (2013). Remittances and the real effective exchange rate. Applied Economics, 45(45), 4959-4970.
Date
2013
Publisher
Routledge
Degree
Supervisors
Rights