Remittances and the boomerang effect: the case of Lebanon (1990-2016)[Transferts de fonds et effet boomerang : le cas du Liban (1990-2016)]

Lebanon is among the top twenty countries remittances recipient in the world. Although they are the country's main source of foreign currency, these transfers are also likely to have negative consequences on the balance of payments. This research is based on a theoretical model based on the equilibrium of the balance of payments which notably makes it possible to evaluate the boomerang effect of remittances on imports. From a simultaneous equation model covering the period 1990-2016, it is estimated that a 1% increase in remittances increases imports by 0.24%. It emerges that remittances from migrants are widely used not to allow productive investments but to increase the income of their families and their consumption, which is largely satisfied by imports.