2007年-世界发展银行全球_Remittances_and_the_Real_Exchange_Rate_33页_568kb

Summary of "Remittances and the Real Exchange Rate"

Core Content

This paper investigates the impact of remittances on the real exchange rate in recipient countries, particularly focusing on Latin American nations. It highlights both the positive and negative effects of remittances on economic development and macroeconomic stability.

Main Points

Positive Development Impact of Remittances

• Poverty Reduction: Empirical evidence suggests that remittances are associated with lower poverty indicators and higher growth rates.
• Stability and Risk Reduction: Remittances tend to reduce output volatility, a measure of economic risk.
• Social Improvements: In some cases, remittances lead to improvements in social indicators, especially for certain socio-economic groups.

Potential Negative Effects

• Real Exchange Rate Appreciation: Large remittances can lead to real appreciation of the currency, which may reduce the competitiveness of export-oriented sectors.
• Dutch Disease Phenomenon: Remittances may cause a shift of resources from tradable to non-tradable sectors, leading to higher wages and inflation, which in turn erode export competitiveness.
• Current Account Deficits: Increased domestic demand due to remittances can widen current account deficits by boosting import demand.
• Monetary Distortions: Remittances can increase monetary aggregates, leading to inflationary pressures and misallocation of investment.

Policy Considerations

• Mitigation Strategies: The paper suggests that policy makers should consider strategies to counter the negative effects of remittances, such as adjusting tax structures to reduce labor costs and possibly sterilize the impact of remittances on the exchange rate.
• Sectoral Impact: The paper emphasizes the need for policies that support tradable sectors and maintain competitiveness in the face of remittance inflows.

Key Findings

• Empirical Evidence: The paper finds that remittances are associated with a significant real exchange rate appreciation.
• Regional Analysis: It explores whether Latin America differs from other regions in this regard and concludes that remittances have a similar effect globally.
• Mechanisms: The impact of remittances on the real exchange rate is explained through three main channels: external equilibrium, internal equilibrium (Balassa-Samuelson effect), and growth effects.
• Robustness: The results are robust to various econometric techniques, including fixed effects and instrumental variables, and are consistent across different control variables.

Data Overview

• Table 1: Shows the real effective exchange rate (REER) changes and remittances to GDP ratios for several Latin American countries between 1990 and 2003.
  • Appreciation Trends: 11 out of 20 countries experienced real exchange rate appreciation.
  • Countries with Highest Appreciation: Belize, Ecuador, El Salvador, Guatemala, and Haiti.
  • Mexico: The largest remittance recipient globally, with a moderate appreciation.
• Figure 1: Illustrates the positive correlation between remittances and real exchange rate appreciation.
• Figure 2: Indicates that only a few countries saw increases in export volumes, while most experienced declines.
• Figure 3: Shows that imports increased in most countries, with some experiencing significant growth.

Empirical Strategy

• Regression Model: The paper uses the following regression model to assess the relationship between remittances and the real exchange rate:

  $$
  \Delta q _ {i t} = \omega^ {\prime} x _ {i t} + \beta \Delta R _ {i t} + v _ {i} + v _ {i t}
  $$

  • $\beta$: Measures the impact of remittances on the real exchange rate.
  • Positive $\beta$: Indicates a real exchange rate appreciation due to remittances.
  • $\beta = 0$: Suggests no impact on the exchange rate.
  • Extension to Regional Analysis: The model is extended to include a dummy variable for Latin America to assess regional differences.

Conclusion

• The paper concludes that while remittances can bring positive development benefits, they can also lead to significant real exchange rate appreciation, which may negatively affect the competitiveness of tradable sectors.
• The findings suggest that remittances do not appear to be an exception in Latin America and that the observed effects are consistent with changes in both the equilibrium and misalignment components of the real exchange rate.
• Policy makers should consider measures to mitigate the adverse effects of remittances, especially in the context of budget constraints and the need to maintain external competitiveness.