The Impact of Workers’ Remittances on Household Consumption in India : Testing for Consumption Augmentation and Stability

• 발행기관: 한국유통과학회
• 저자명: Harridutt Ramcharran
• 간행물 정보: 『한국유통과학회 학술대회 논문집』2017년 동계 국제학술대회, 73~74쪽, 전체 2쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2017.12.27

영문 초록

India is the top recipient of workers’ remittance flows; recent data indicate that the Remittances/GDP ratio has increased from 2.7% in 2000 to 3.36% in 2015. We apply a consumption behavior model, based on the “permanent income hypothesis”, to estimate the consumption augmentation and the stability impact for the period of 1989-2014. The independent variables are: (i) real per capita income (exclusive of remittances) is the measure of “permanent income”, (ii) remittances is the measure of “transitory income”, and (iii) real interest rate as the indicator of consumers’ ability for intertemporal consumption. The economic ramifications are important since current global risk factors could decrease flows in the future. The results indicate the significance of all three variables; there are: (i) evidence of significant consumption augmentation, (ii) consumption responds higher to remittances than to real income, the remittance elasticity is 0.571 and the income elasticity is 0.31, and (iii) evidence of pro-cyclical effect. The VAR model indicates some linkages and causality in the series that result in small response to the shocks. Policies to increase or stabilize remittance flows and to leverage remittances for economic development are important.

목차

Abstract

1. Introduction

2. Model Specification

References

키워드

Remittances Transitory income Permanent income Consumption smoothing India