Open AccessTHE IMPACT OF ECONOMIC SITUATION IN THE COUNTRIES RECEIVING MIGRANTS ON REMITTANCES FLOWS
Author(s) -
Andrej Přívara
Publication year - 2020
Publication title -
the euraseans : journal on global socio-economic dynamics
Language(s) - English
Resource type - Journals
ISSN - 2539-5645
DOI - 10.35678/2539-5645.6(25).2020.49-55
Subject(s) - economics , recession , diversification (marketing strategy) , volatility (finance) , diaspora , developing country , economic stability , development economics , consumption (sociology) , developed country , monetary economics , demographic economics , business , macroeconomics , economic growth , population , finance , political science , social science , demography , marketing , sociology , law
The studies on remittances focus mainly on their effects on the stability of households’ incomes and/or consumption patterns. The purpose of the current paper is to highlight that the volatility of remittances can have the opposite effect. We believe that the conjuncture of the countries that receive migrants also determines their money transfers and their changes are then transmitted to the economy of the migrants’ country of origin, thus increasing the instability in the latter. We believe that the volatility of remittances is higher under specific conditions, namely, when they represent a substantial part of household income and when migrants are highly concentrated in one or several countries only. Otherwise, even if one of the recipient countries is experiencing temporary economic issues, flows will be less affected since the other host countries may not be affected by such a downturn in their economy. Diversification of the diaspora is therefore crucial for the stability of remittances since the more is the number of host countries, the less likely is a sudden decline in remittances in the event of a recession in one of those countries.