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The Role of Remittances in Financing the Current Account Deficit: The Case of Serbia

Author

Listed:
  • Čakajac Božidar

    (PhD Student at the University of Kragujevac, Liceja Kneževine Srbije 3, 34000 Kragujevac, Serbia)

  • Janković Nenad

    (University of Kragujevac, Faculty of Economics, Liceja Kneževine Srbije 3, 34000 Kragujevac, Serbia)

  • Luković Stevan

    (University of Kragujevac, Faculty of Economics, Liceja Kneževine Srbije 3, 34000 Kragujevac, Serbia)

Abstract

Migrations of the resident population in Serbia, with the Western European countries as the main destination, have influenced remittances becoming an important source of income from abroad. Relevant economic literature, as well as the influential views expressed in the international financial institutions’ reports, indicate that remittances are a more stable type of inflow of funds from abroad to developing countries compared to other types of capital movements. In addition to the positive economic effects of remittances, they also play a significant role in the balance of payments deficit reduction. The subject of this research refers to the examination of the role of remittances in financing the current account deficit in Serbia. The research goal is to explore whether the importance of remittances as a factor in the balance of payments deficit reduction in Serbia increased in the period 2007-2021. The results of the research show that remittances have become an important factor in current account deficit reduction in Serbia during the observed period.

Suggested Citation

  • Čakajac Božidar & Janković Nenad & Luković Stevan, 2023. "The Role of Remittances in Financing the Current Account Deficit: The Case of Serbia," Naše gospodarstvo/Our economy, Sciendo, vol. 69(3), pages 35-44, September.
    • Handle: RePEc:vrs:ngooec:v:69:y:2023:i:3:p:35-44:n:5
    DOI: 10.2478/ngoe-2023-0016
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    References listed on IDEAS

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    1. Giuliano, Paola & Ruiz-Arranz, Marta, 2009. "Remittances, financial development, and growth," Journal of Development Economics, Elsevier, vol. 90(1), pages 144-152, September.
    2. Bugamelli, Matteo & Paternò, Francesco, 2009. "Do Workers' Remittances Reduce the Probability of Current Account Reversals?," World Development, Elsevier, vol. 37(12), pages 1821-1838, December.
    3. Ziesemer Thomas H.W., 2009. "Worker Remittances and Growth: The Physical and Human Capital Channels," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 229(6), pages 743-773, December.
    4. Lim, Sokchea & Simmons, Walter O., 2015. "Do remittances promote economic growth in the Caribbean Community and Common Market?," Journal of Economics and Business, Elsevier, vol. 77(C), pages 42-59.
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    More about this item

    Keywords

    Migrations; Remittances; Current account; Balance of payments; Serbia;
    All these keywords.

    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements

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