Preliminary communication

THE ROLE OF REMITTANCES IN FINANCIAL CRISIS: EMPIRICAL EVIDENCE FROM MACEDONIA

Vesna Bucevska

Abstract

The recent global financial crisis has heated the debate among economists on the role of migrant workers’ remittances in times of financial crisis: Are they a shock absorber or a shock transmitter? The objective of this paper is to find out whether the remittances sent to Macedonia have a stabilizing or destabilizing effect. By specifying a vector error correction (VEC) model, we find evidence that real remittances have a destabilizing effect on the output both of the home country (Macedonia) and the host country (Germany). Consequently, they could not cushion large fluctuations in Macedonian output in stage of economic downturn.

Keywords

remittances; migration; cyclicality; financial crisis; vector error correction model (VEC)

Hrčak ID:

77600

URI

https://hrcak.srce.hr/77600

Publication date:

1.12.2011.

Article data in other languages: croatian

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