{"title":"Beyond the Balassa-Samuelson Effect: Do Remittances Trigger the Dutch Disease?","authors":"Boris Fisera, Menbere Workie Tiruneh","doi":"10.1080/00128775.2022.2102038","DOIUrl":null,"url":null,"abstract":"ABSTRACT We investigate the impact of remittance inflows on the real exchange rate using a sample of 134 developing and emerging economies. Using heterogeneous panel cointegration approach, we find that remittances contribute to long-term real appreciation of the domestic currency, which is beyond the level implied by the Balassa-Samuelson effect. Consequently, we find evidence that remittances might contribute to triggering the phenomenon of the Dutch disease. We also find evidence for heterogeneity in the effects of remittances on the real exchange rate: having floating exchange rate, higher economic freedom and higher financial development reduces the long-run appreciation due to remittance inflows.","PeriodicalId":45883,"journal":{"name":"Eastern European Economics","volume":"61 1","pages":"23 - 65"},"PeriodicalIF":1.3000,"publicationDate":"2022-08-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"2","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Eastern European Economics","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1080/00128775.2022.2102038","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 2
Abstract
ABSTRACT We investigate the impact of remittance inflows on the real exchange rate using a sample of 134 developing and emerging economies. Using heterogeneous panel cointegration approach, we find that remittances contribute to long-term real appreciation of the domestic currency, which is beyond the level implied by the Balassa-Samuelson effect. Consequently, we find evidence that remittances might contribute to triggering the phenomenon of the Dutch disease. We also find evidence for heterogeneity in the effects of remittances on the real exchange rate: having floating exchange rate, higher economic freedom and higher financial development reduces the long-run appreciation due to remittance inflows.
期刊介绍：
Eastern European Economics publishes original research on the newly emerging economies of Central and Eastern Europe, with coverage of the ongoing processes of transition to market economics in different countries, their integration into the broader European and global economies, and the ramifications of the 2008-9 financial crisis. An introduction by the journal"s editor adds context and expert insights on the articles presented in each issue.
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