Rukhsana KalimMuhammad Shahbaz2011-09-082011-09-082009International Research Journal of Finance and Economics, Issue 29, pp 46-58, 2009https://escholar.umt.edu.pk/handle/123456789/285Remittances 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.enRemittancesPovertyEconomy of PakistanArticle