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Effects of remittance’s inflow and measuring the impact of remittances on GDP per capita growth: Application of ARCH/GARCH and logit model

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  • Goran Miladinov

    (University in Skopje, North Macedonia.)

Abstract

This research aims to explore the dynamics of remittances and their volatility, applying the ARCH/GARCH model in the countries of the Balkans (Bosnia and Herzegovina, Macedonia, Croatia and Albania). Furthermore, the comparative aspect of remittance’s effect on the probability of GDP per capita growth using ML Logit Binary model within these countries, including Serbia as well was also investigated. UN and World Bank annual aggregate data on personal remittances inflow as % of GDP and GDP per capita from 1998-2019 were used. The volatility spillover within the countries can be noticed. It means that remittance’s inflow volatility in these countries is influenced by its own ARCH and GARCH factors or own shocks. The separate results from Logit models show that the probability of GDP per capita growth as a function of remittances for the period (1998-2019 and 2007-2019 for Serbia) has been under positive significant effect only for Albania at 5% level and for Bosnia and Herzegovina at 10% level.

Suggested Citation

  • Goran Miladinov, 2021. "Effects of remittance’s inflow and measuring the impact of remittances on GDP per capita growth: Application of ARCH/GARCH and logit model," Remittances Review, Remittances Review, vol. 6(1), pages 55-73, May.
    • Handle: RePEc:mig:remrev:v:6:y:2021:i:1:p:55-73
    DOI: https://doi.org/10.33182/rr.v6i1.1242
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