The macroeconomic effects of migrants' remittances in Moldova: a stock–flow consistent model

Artikel

Migrants' remittances are an essential source of income in many developing countries. In this article, we build a post-Keynesian stock–flow consistent model adapted to Moldova, one of the top recipients of remittances. In addition to increasing household consumption, migrants' transfers have strong effects on economic growth in Moldova. However, remittances are very sensitive to the economic conditions in migrants' destination countries, especially since the 2008 global financial crisis. After including remittances in consumption behavior and lenders' risk, we run simulations to show how shocks in migrants' destination countries (that is, Europe and Russia) impact the Moldovan economy through fluctuations in remittances. First, the increasing instability of remittances explains a significant portion of the economic volatility experienced by Moldova. Second, the high level of imports implies a weak multiplier effect of remittances, leading to an unsustainable pattern of growth.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: European Journal of Economics and Economic Policies: Intervention (EJEEP) ; ISSN: 2052-7772 ; Volume: 16 ; Year: 2019 ; Issue: 1 ; Pages: 31-54

Classification and Topics

• Classification: Wirtschaft ; General Aggregative Models: Keynes; Keynesian; Post-Keynesian ; Business Fluctuations; Cycles ; International Migration ; Remittances ; Economic Growth of Open Economies
• Subject: remittances ; Moldova ; stock-flow consistent models ; business cycles ; migration ; volatility

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Le Heron, Edwin ; Yol, Nicolas
• Event: Veröffentlichung
• (who): Edward Elgar Publishing
• (where): Cheltenham
• (when): 2019

Further information

• DOI: doi:10.4337/ejeep.2018.0039
• Handle: http://hdl.handle.net/10419/277436
• Last update: 11.03.2024, 11:42 PM CET