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Do Remittances to Latin America Depend on the U.S. Business Cycle?

Author

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  • Mrs. Ewa Gradzka
  • Mr. Shaun K. Roache

Abstract

We use a range of methods and remittance data from 1990 to 2007 to assess the strength and significance of linkages between remittance flows to Latin America and the U.S. business cycle. All of the evidence suggests that remittance flows are relatively insensitive to fluctuations in the U.S. cycle, underlining their role as a stable source of external financing, in good times and bad. A number of factors, notwithstanding uncertainties related to official remittance data reliability, might explain this result, including remittance smoothing and flexible immigrant labor markets.

Suggested Citation

  • Mrs. Ewa Gradzka & Mr. Shaun K. Roache, 2007. "Do Remittances to Latin America Depend on the U.S. Business Cycle?," IMF Working Papers 2007/273, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2007/273
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    Cited by:

    1. Bharati Basu & James T. Bang, 2013. "Insurance and remittances: New evidence from Latin American immigrants to the US," Migration Letters, Migration Letters, vol. 10(3), pages 383-398, September.
    2. Farid Farid, 2014. "The impact of exchange rate policy on remittances in Morocco: A Threshold VAR analysis," Economics Bulletin, AccessEcon, vol. 34(4), pages 2351-2360.
    3. Faruk Balli & Thi Thu Ha Nguyen & Hatice Ozer Balli, 2023. "Emigrants’ visit home and remittance inflows nexus," Tourism Economics, , vol. 29(5), pages 1405-1411, August.
    4. Magnusson, Kristin, 2009. "The Impact of U.S. Regional Business Cycles on Remittances to Latin America," SSE/EFI Working Paper Series in Economics and Finance 710, Stockholm School of Economics.
    5. Alejandro Jara & Camilo Tovar, 2008. "Monetary and financial stability implications of capital flows in Latin America and the Caribbean," BIS Papers, Bank for International Settlements, number 43.
    6. Vargas-Silva, Carlos, 2008. "Are remittances manna from heaven? A look at the business cycle properties of remittances," The North American Journal of Economics and Finance, Elsevier, vol. 19(3), pages 290-303, December.
    7. Karla Borja, 2012. "The Impact Of The Us Recession On Immigrant Remittances In Central America," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(03), pages 1-24.
    8. 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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    Keywords

    WP; business cycle;

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