Arbeitspapier/Forschungsbericht

Jahr der Veröffentlichung: 2017

URL: https://www.cb.cityu.edu.hk/ef/doc/GRU/WPS/GRU%232017-004%20Immaculate%20Machasio%20and%20Peter%20Tillmann.pdf

Serientitel: Global Research Unit Working Paper

Serienzählung: 2017-004

Abstract: 

Remittance inflows from overseas workers are an important source of foreign funding for developing and emerging economies. The literature is inconclusive about the cyclical nature of remittance inflows. To the extent remittances are procyclical they pose a challenge to monetary policy: a tightening of policy will be less effective if at the same time remittances increase strongly. The same is true for a policy easing under exceptionally weak remittance inflows. This paper estimates a series of nonlinear (smooth-transition) local projections to study the effectiveness of monetary policy under different remittance inflows regimes. The model is able to provide state-dependent impulse response functions. We show that for Kenya, Mexico, Colombia and the Philippines monetary policy indeed has a smaller domestic effect under strong inflows of remittances. These results have important implications for the design of inflation targeting in developing countries.

Harvard-Zitierstil: Machasio, I. and Tillmann, P. (2017) Remittance Inflows and State-Dependent Monetary Policy Transmission in Developing Countries. (Global Research Unit Working Paper, 2017-004). Hong Kong: City University of Hong Kong. https://www.cb.cityu.edu.hk/ef/doc/GRU/WPS/GRU%232017-004%20Immaculate%20Machasio%20and%20Peter%20Tillmann.pdf

APA-Zitierstil: Machasio, I., & Tillmann, P. (2017). Remittance Inflows and State-Dependent Monetary Policy Transmission in Developing Countries. (Global Research Unit Working Paper, 2017-004). City University of Hong Kong. https://www.cb.cityu.edu.hk/ef/doc/GRU/WPS/GRU%232017-004%20Immaculate%20Machasio%20and%20Peter%20Tillmann.pdf