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Are Remittances Manna From Heaven? A Look at the Business Cycle Properties of Remittances

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  • Carlos Vargas-Silva

    (Department of Economics and International Business, Sam Houston State University)

Abstract

This article documents the business cycle properties of workers’ remittance flows to Mexico. We also discuss key differences between the cyclical properties of remittance inflows and the cyclical properties of foreign direct investment (FDI). We find evidence that remittances are countercyclical with respect to Mexico’s business cycle. However, this result is not robust to the use of different measures of remittances. The lack of a robust relationship between remittances and Mexico’s business cycle, suggests that the use of remittances to smooth cyclical fluctuations in output may not be a straightforward strategy.

Suggested Citation

  • Carlos Vargas-Silva, 2009. "Are Remittances Manna From Heaven? A Look at the Business Cycle Properties of Remittances," Working Papers 0905, Sam Houston State University, Department of Economics and International Business.
    • Handle: RePEc:shs:wpaper:0905
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    References listed on IDEAS

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