The Tale of Three Amigos: Remittances, Exchange Rates, and Money Demand in Mexico
The author analyzes the relationship between remittances, exchange rates, and money demand in Mexico. He finds that shocks to remittances have a positive impact on domestic money demand. The results also suggest the existence of a bi-directional relationship between remittances and the exchange rate. Furthermore, positive shocks to remittances are found to have a negative impact on Mexico's real exchange rate. This indicates that remittances appreciate the Mexican peso and therefore may impact on the competitiveness of the tradable sector negatively. Copyright © 2008 The Author. Journal compilation © 2008 Blackwell Publishing Ltd.
Year of publication: |
2009
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Authors: | Vargas-Silva, Carlos |
Published in: |
Review of Development Economics. - Wiley Blackwell. - Vol. 13.2009, 1, p. 1-14
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Publisher: |
Wiley Blackwell |
Saved in:
freely available
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