International Remittances, Migration, and Primary Commodities in FSGM

January 30, 2017

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Format: Chicago

Stephen Snudden. International Remittances, Migration, and Primary Commodities in FSGM, (USA: International Monetary Fund, 2017) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper adds international migration and remittances into the IMF’s Flexible System of Global Models (FSGM). FSGM is a global general equilibrium model with endogenous primary commodity markets. A method to estimate the structural dynamics of major remitter regions is proposed. The dynamics of remittances and migration in FSGM are calibrated to be consistent with the main stylized facts of the empirical estimates. Structural disturbances pertinent to current global remittance flows are examined. These disturbances include disruptions to oil supply, output variation in Europe and the United States, labor nationalization policies in Saudi Arabia, and a global reduction in the cost to remit. The multilateral framework illustrates how remittance inflows need not originate from the region with the underlying economic disturbance but can arise from third party remitter regions affected by global commodity markets. The results also illustrate that the correlation of remittance inflows and the real GDP of labor-exporting economies can be either positively or negatively correlated. The evidence suggests that the behavioral incentive to migrate and remit cannot be deduced from correlations of real GDP and remittance inflows.

Subject: Balance of payments, Commodities, Foreign labor, Labor, Oil, Oil prices, Prices, Remittances

Keywords: Demand shock, Foreign labor, Global, Inflows correlation, International Migration, Macroeconomic Interdependence, Migration-remittances corridor, Nationalization policy, Oil, Oil Price, Oil prices, Oil-importing economy, Real GDP, Remittance dynamics, Remittance flow, Remittance inflow, Remittance outflow, Remittances, WP

Publication Details

Pages:

43
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2017/020
Stock No:

WPIEA2017020
ISBN:

9781475572957
ISSN:

1018-5941

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