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Beware of Emigrants Bearing Gifts : Optimal Fiscal and Monetary Policy in the Presence of Remittances / Michael Gapen, Thomas Cosimano, Ralph Chami.
- Format:
- Book
- Government document
- Author/Creator:
- Gapen, Michael.
- Series:
- IMF Working Papers; Working Paper ; No. 2006/061
- IMF Working Papers
- Language:
- English
- Subjects (All):
- Emigrant remittances--Econometric models.
- Emigrant remittances.
- Fiscal policy--Econometric models.
- Fiscal policy.
- Monetary policy--Econometric models.
- Monetary policy.
- Physical Description:
- 1 online resource (51 p.)
- Edition:
- 1st ed.
- Place of Publication:
- Washington, D.C. : International Monetary Fund, 2006.
- Language Note:
- English
- Summary:
- This paper uses a stochastic dynamic general equilibrium model to investigate the influence of countercyclical remittances on the conduct of fiscal and monetary policy and trace their effects on real and nominal variables in a business cycle setting. We show that remittances raise disposable income and consumption, and insure against income shocks, thereby raising household welfare. However, remittances increase the correlation between labor and output, thereby producing a more volatile business cycle and increasing output and labor market risk. Optimal monetary policy in the presence of remittances deviates from the Friedman rule, highlighting the need for independent government policy instruments.
- Contents:
- ""Contents""; ""I. INTRODUCTION""; ""II. REMITTANCES""; ""THEIR MOTIVATION""; ""III. A STOCHASTIC MONETARY ECONOMY""; ""IV. THE RAMSEY EQUILIBRIUM""; ""V. RESULTS""; ""VI. CONCLUSION""; ""References""
- Notes:
- "March 2006."
- Includes bibliographical references.
- Description based on print version record.
- ISBN:
- 9786613828804
- 9781462380084
- 1462380085
- 9781452714837
- 1452714835
- 9781283516358
- 1283516357
- 9781451908572
- 1451908571
- OCLC:
- 698585490
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