An Essay on Remittances Effects to Economic Development: A Survey

概要

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In economic literature, the relationship between remittances and economic development is somehow ambiguous. Some supports their positive correlation but others stress negative. This paper surveys some existing literatures on the relationship from four points of view such as brain drain or gain, business cycle, Dutch disease or exchange rate appreciation, and direct and empirical effects of remittances on economic development and growth. The relationship is still ambiguous and mixed but the effects on exchange rate should be focused on if remittances are negatively correlated with economic development. For more fruitful empirical research results, it is required to improve statistics. Among three types of inflows to developing countries such as workers' remittances, ODA, and FDI, a lot of literatures regard that FDI contains the strongest development-promoting effects. According to the conclusion of this study, workers' remittances' effects are still ambiguous. Remaining issue is to explore the differences of development-promoting effects among these three.
2009-03-25