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Remittances Channel and Fiscal Impact in the Middle East, North Africa, and Central Asia, Yasser Abdih, Ralph Chami, Christian Ebeke, Adolfo Barajas

This paper identifies a remittances channel that transmits exogenous shocks, such as business cycles in remittance-sending countries, to the public finances of remittance-receiving countries. Using panel data for remittance-receiving countries in the Middle East, North Africa, and Central Asia, three types of results emerge. First, remittances appear to be strongly procyclical vis-à-vis sending country income. Second, remittances tend to be spent on consumption of both imported and domestically produced goods, rather than on investment. Third, shocks in the sending countries are transmitted via remittances to the public finances - specifically, tax revenues - of receiving countries. In the case of the 2009 global downturn, this impact was particularly strong for several countries in the Caucasus and Central Asia, whereas in the subsequent recovery in 2010 virtually all receiving countries benefitted from an upturn in remittance-driven tax revenues
Table Of Contents
Cover; Contents; I. Introduction; II. Empirical Approach; A. Remittances and Foreign Shocks; B. How Are Remittances Spent?; C. How Do Tax Revenues React to Private Demand Components?; D. Remittances and the Tax Revenue Ratios: The Reduced-Forms Estimates; III. Econometric Results; A. The Elasticity of Remittances to the Sending Country Income; B. Remittances and Private Demand; C. Elasticity of Tax Revenue Ratios with Respect to Their "Tax Bases"; D. Remittances and Tax Revenue Ratios; IV. Foreign Shocks, The Remittances Channel and Tax Revenues: What Happened in 2009 and 2010?
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (42 p.)
Specific Material Designation
Form Of Item

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