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Income thresholds in the remittances-growth association? a case study of Fiji

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  • Nikeel Nishkar Kumar
  • Arvind Patel

Abstract

Research indicates that remittances have mixed effects on growth. In this study, we investigate the role of income thresholds in this association for Fiji. Income thresholds are measured by thresholds in per-worker real GDP and are identified using the self-exciting threshold autoregression model over the period 1980 to 2017. A threshold autoregressive distributed lag model is subsequently developed. A single threshold in per-worker real GDP is estimated at US$5891. Remittances promote growth if income exceeds the threshold but is negative otherwise. Hence, remittances support growth-enhancing activities at high-income levels but may finance imports at the expense of domestic production at lower income levels.

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  • Nikeel Nishkar Kumar & Arvind Patel, 2022. "Income thresholds in the remittances-growth association? a case study of Fiji," Applied Economics Letters, Taylor & Francis Journals, vol. 29(19), pages 1815-1823, November.
    • Handle: RePEc:taf:apeclt:v:29:y:2022:i:19:p:1815-1823
    DOI: 10.1080/13504851.2021.1963402
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    1. Kumar, Nikeel Nishkar & Patel, Arvind, 2023. "Nonlinear effect of air travel tourism demand on economic growth in Fiji," Journal of Air Transport Management, Elsevier, vol. 109(C).

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