Remittances and poverty nexus: evidence from Pakistan
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Date
2009
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Journal ISSN
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Publisher
International Research Journal of Finance and Economics
Abstract
Remittances play a very important role in eliminating poverty of a nation.
Remittances it is believed increase the money supply and stimulate demand for
consumption and investment. The basic objective of the present paper is to explore the
various factors affecting poverty with particular emphasis on the relationship between
poverty and foreign remittances. It is hypothesized that remittances, trade openness, GDP
growth, inflation, urbanization and tax rates are the possible variables affecting poverty.
The remittances-poverty nexus is tested both for the short-run as well as for the long-run.
Fully modified ordinary least square (FMOL) technique is used for establishing short-run
and long-run relationship between poverty and its determinants. The period selected is from
1973-2006. Results support hypothesis that remittances bring a decline in poverty.
Description
Keywords
Remittances, Poverty, Economy of Pakistan
Citation
International Research Journal of Finance and Economics, Issue 29, pp 46-58, 2009