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Migration Remittances Inflows and Macroeconomic Shocks: The Case of Egypt

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  • Aliaa Nabil Khodeir

    (Faculty of Commerce and Business Administration, Helwan University, Egypt.)

Abstract

This paper explores to what extent Egyptian remittances inflows serve as a hedge against macroeconomic shocks. This is the first study applied on Egypt focusing on both the determinants of remittances and their cyclical behavior at the same time. By estimating a vector error correction (VEC) model, it was found that remittances inflows were associated significantly with real per capita income, money supply and oil price, in both long and short run. This indicated that remittance flows to Egypt were for investment and not for family support purposes. The analysis of impulse response functions confirmed that remittances inflows were procyclical with output shocks, reducing support for the ability of remittances as a hedge against macroeconomic shocks. This paper suggests that; policy makers should deal cautiously with the different aspects of remittances and its analysis could be applied to other small open economies.

Suggested Citation

  • Aliaa Nabil Khodeir, 2015. "Migration Remittances Inflows and Macroeconomic Shocks: The Case of Egypt," International Journal of Economics and Financial Issues, Econjournals, vol. 5(4), pages 1001-1010.
    • Handle: RePEc:eco:journ1:2015-04-20
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    References listed on IDEAS

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    1. Jeffrey Frankel, 2011. "Are Bilateral Remittances Countercyclical?," Open Economies Review, Springer, vol. 22(1), pages 1-16, February.
    2. BORJA, Karla, 2013. "Home And Host Country Business Cycles And Remittances: The Case Of El Salvador And The Dominican Republic," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 13(2), pages 101-118.
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    4. Mr. Adolfo Barajas & Mr. Ralph Chami & Mr. Christian H Ebeke & Mr. Sampawende J Tapsoba, 2012. "Workers’ Remittances: An Overlooked Channel of International Business Cycle Transmission?," IMF Working Papers 2012/251, International Monetary Fund.
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    Cited by:

    1. López Parra, Elibeth & Cruz-Rodríguez, Alexis, 2016. "Determinantes macroeconómicos de las remesas en los países del DR-CAFTA [Macroeconomic determinants of remittances in the countries of DR- CAFTA]," MPRA Paper 68886, University Library of Munich, Germany.
    2. Anthony Enisan Akinlo & Michael Segun Ojo, 2021. "Examining the asymmetric effects of oil price shocks on remittances inflows: evidence from Nigeria," SN Business & Economics, Springer, vol. 1(10), pages 1-16, October.
    3. Omneia HELMY & Chahir ZAKI & Aliaa ABDALLAH, 2020. "Do Workers’ Remittances Promote Consumption Stability In Egypt?," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 20(2), pages 127-144.

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    More about this item

    Keywords

    Remittances; Business Cycle; Macroeconomic Shocks; Egypt;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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