Do Remittances Induce Inflation? A Study for Developing Countries
DOI:
https://doi.org/10.5281/zenodo.17381201Keywords:
Remittances, Inflation, Exchange Rate, Panel DataAbstract
Scholars overwhelmingly have analyzed the effect of workers’ remittances on economic growth since remittances are perceived as the source of financing the capital in the receiving county. However, beside the positive effect of remittances on economic growth, they may deter the stability of the general price level and may cause higher inflation. Therefore, main objective of this study is to find the effect of remittances on inflation rate in 4 developing countries that receive the highest volume of remittances inflows in the world for the period 1990-2020. To do so, we have applied three panel data methods (FE, RE and one-step system GMM). At the end of the study, we have concluded that remittances induce inflation rate in the host county.
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