Remittances and the Dutch Disease

• Tác giả: Pablo A Acosta
• Ngôn ngữ: eng
• Ký hiệu phân loại: 325.24 International migration and colonization
• Thông tin xuất bản: 2012
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 294819
• Chủ đề: 1. International Linkages to Development; 2. Remittances F240; 3. Resource Booms Q330; 4. Role of International Organizations O190

Tóm tắt

Using data for El Salvador and Bayesian techniques, we develop and estimate a two-sector dynamic stochastic general equilibrium model to analyze the effects of remittances on emerging market economies. We find that, whether altruistically motivated or otherwise, an increase in remittance flows leads to a decline in labor supply and an increase in consumption demand that is biased toward non-tradables. The higher non-tradable prices serve as incentive for an expansion of that sector, culminating in reallocation of labor away from the tradable sector--a phenomenon known as the Dutch disease. Quantitative results also indicate that remittances improve the welfare of households because they smooth income flows and increase consumption and leisure levels. A BVAR analysis provides results that are consistent with the dynamics of the model.