Are Immigrant Remittance Flows a Source of Capital for Development

WPIEA1892003 Image
Price:  $15.00

Author/Editor: Ralph Chami, Samir Jahjah, Connel Fullenkamp
Release Date: © September, 2003
ISBN : 978-1-45185-963-8
Stock #: WPIEA1892003
Stock Status: Available

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The role of remittances in development and economic growth is not well understood. This is partly because the literatures on the causes and effects of remittances remain separate. We develop a framework that links the motivation for remittances with their effect on economic activity. Because remittances take place under asymmetric information and economic uncertainty, there exists a significant moral hazard problem. The implication is that remittances have a negative effect on economic growth. We test this prediction using panel methods on a large sample of countries. The results indicate that remittances do have a negative effect on economic growth, which indicates that the moral hazard problem in remittances is severe.


International financial system , Remittances

More publications in this series: Working Papers

More publications by: Ralph Chami ; Samir Jahjah ; Connel Fullenkamp