Asymmetric Relationship between Inflation and Remittance Outflows in Saudi Arabia: A NARDL Approach

• 영문명: Asymmetric Relationship between Inflation and Remittance Outflows in Saudi Arabia: A NARDL Approach
• 발행기관: 한국유통과학회
• 저자명: Musa FOUDEH Bashier AL-ABDULRAZAG
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 10 No.1, 79~89쪽, 전체 11쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2023.01.31

영문 초록

The paper aims to investigate the asymmetric long-run and short-run relationships between inflation and remittance outflows in the Kingdom of Saudi Arabia (hereafter KSA) over the period 1971−2019 by using the Nonlinear Autoregressive Distributed Lag (NARDL) model. The statistical tests have supported the validity and stability of the model. The Wald F-test statistics confirm the existence of a long-run equilibrium relationship among the model variables; remittance outflows, positive (negative) shocks in inflation rates, investment, real GDP, and trade openness. Moreover, the empirical results confirm the existence of an asymmetric effect of the inflation rate on remittance outflows. The response of foreign workers to an increase in inflation rates differs from their response to a decrease in inflation rates. However, this asymmetric relationship between the increases/decreases in inflation and remittance outflows is significantly weak. The weakness of this relationship is due to the high marginal remittance propensity of migrant workers, which is explained by the low consumption propensity of foreign workers and their ability to adjust to the high cost of living due to inflation and the imposition of accompanying fees. Finally, the change in the inflation rate is not among the main factors influencing foreign remittance decisions in Saudi Arabia.

목차

1. Introduction

2. Literature Review

3. Econometric Model and Methodology

4. Results and Discussion

5. Discussion

6. Conclusion

References

키워드

Saudi Arabia Asymmetric Relationship NARDL Inflation Remittances