The impact of remittances on economic growth in small-open developing economies
Journal of Applied Sciences
Glisten Strategic Solutions, P.O. Box MB 658, Accra, Ghana; Department of Economics, Central University College, Accra, Ghana
The essence of this study is to verify the macroeconomic implications of cross-border remittances for economic growth prospects of small-open developing economies for the period, 1996-2006. A set of dynamic panel models specified within the framework of Blundell-Bond Generalized Method of Moments (GMM) was empirically analyzed. Using annual panel data from 31 small-open developing countries from Sub-Saharan Africa, Latin America and the Caribbean, this study argues that, contemporaneously, remittances contribute significantly to growth in small-open developing economies. Remittances, however, contribute more to long-run economic growth in Latin America and the Caribbean than to Sub-Saharan Africa. In dynamic terms, remittances retard growth, but with overall positive long-run growth impact across these developing economies. The methodology is very important to apply in another field. © 2009 Asian Network for Scientific Information.
Economic growths; Latin America; Panel data; Remittances; Sub-saharan africa; Developing countries; Economics