The fundamental objective of this study is to empirically explore the macroeconomic factors that ... more The fundamental objective of this study is to empirically explore the macroeconomic factors that explain variations in migrant remittance inflows to Sub-Saharan Africa (SSA). In doing this, the paper sampled 38 out of 48 SSA countries for which consistent balanced panel data can be constructed for the period 2000-2009. The Blundell-Bond system GMM dynamic panel data analytical framework was adopted. The results show that migrant remittances are largely driven by altruism, a signal that the sub-region has not been able to attract more ‘self-interest remittances’, probably due to unattractive investment climate arising out of implementation of unsound macroeconomic policies. The key macroeconomic determinants of remittance flows, measured as a percentage of GDP, are home-country income, host-country income, income differential, inflation, real interest rate differential, real exchange rate depreciation, private sector credit, institutional quality and remittance inflows inertia. While...
This study estimates the threshold level and the optimal range of inflation conducive for economi... more This study estimates the threshold level and the optimal range of inflation conducive for economic growth in the West African Monetary Zone (WAMZ) with focus on Nigeria and Ghana. By an extension, the study endeavours to identify the determinants and direction of growth in these economies. The empirical model formulated is non-linear, reflecting the structure of the economies under study and requiring a conditional least squares estimation technique that has been widely used to estimate optimal inflation for both developed and developing economies. The findings strongly suggest the existence of threshold inflation levels for both countries, but not at the single digit that the WAMZ inflation convergence criterion dictates. The estimated optimal inflation ranges, however, indicate that the two countries can comply with the WAMZ single-digit inflation criterion without any significant loss of real GDP growth. The results are useful for policymakers in providing some clues in setting a...
In this paper we analyzed a dynamic cross-country panel dataset on 31 sampled developing countrie... more In this paper we analyzed a dynamic cross-country panel dataset on 31 sampled developing countries involving 16 Latin America and the Caribbean, and 15 Sub-Sahara African countries within the framework of Blundell-Bond Generalized Method of Moments (GMM). Our results show that generally the impact of remittance inflows on overall development differ across regions. Specifically, the paper reveals that the positive role of international remittances in the development process of underdeveloped economies is more pronounced in Sub-Saharan Africa than in Latin America and the Caribbean sub-region where remittances actually retard socioeconomic development prospects. It would, therefore, be politically imprudent and economically suicidal, to over-depend on international remittances as the panacea for the underdevelopment of Sub-Saharan Africa, Latin America and the Caribbean. The contribution of this paper is unique because it has examined the long-run impact of international remittances o...
Poverty is a multi-dimensional problem that manifests itself as either physiological or social de... more Poverty is a multi-dimensional problem that manifests itself as either physiological or social deprivation or both. It has root causes spanning cultural, social, economic and political spheres. However, poverty measurements have concentrated on consumption or economic poverty. Recent United Nations’ report indicates that while proportion of people living below the extreme poverty line of US$1.25 a day in Sub-Saharan Africa (SSA) declined over the period 1990 – 2010, the number of extreme poor rose in absolute terms. This paper examines the role that the economy can play in poverty reduction. It identifies three channels through which the economy can affect poverty. These are the growth, income distribution and efficiency channels. It also highlights the economic conditions and policies needed for poverty reduction.
Remittances, Exchange Rate, and Monetary Policy in Ghana. by. Deodat E. Adenutsi 1 and Christian ... more Remittances, Exchange Rate, and Monetary Policy in Ghana. by. Deodat E. Adenutsi 1 and Christian RK Ahortor 2. ABSTRACT. Within the context of the Ghanaian macroeconomy, this paper explores the monetary factors underlying ...
The study investigates the effect of changes in the exchange rate on output growth and inflation ... more The study investigates the effect of changes in the exchange rate on output growth and inflation in the WAMZ economies. It formulates an open-economy general equilibrium model which highlights the interrelationships among real GDP growth, inflation, exchange rate depreciation/ appreciation and money supply growth. Employing quarterly data series for the period 1981Q1 to 2010Q4 for all countries except Ghana (1983Q2 to 2010Q4) and Guinea (1989Q1 to 2010Q4), the study uses the vector autoregressive (VAR) model to estimate the impulse response functions and variance decompositions for inflation and output in order to determine how inflation and output respond to changes in the exchange rate, and what proportion of inflation and output variance can be explained by the exchange rate. The results of the study suggest that exchange rate had significant impact on inflation in all the Member States. The results reveal a negative relationship between real exchange rate and real GDP growth for...
This paper examines the relationship between exchange-rate volatility and export performance in t... more This paper examines the relationship between exchange-rate volatility and export performance in the WAMZ countries using quarterly data for the period 1990-2010. The paper utilizes the Engel-Granger Dynamic OLS (DOLS) estimation technique as well as the Generalized Auto Regressive Conditional Heteroskedasticity (GARCH) approach to model the real exchange rate volatility. In conformity with theoretical considerations, the results indicate that increases in the exchange-rate volatility exert a significant negative effect upon export in Liberia, Nigeria and Sierra Leone. While a positive relationship is established in the case of The Gambia, exchange-rate volatility impact on Ghana and Guinea is insignificant. The results also reveal a positive relationship between terms of trade and export performance for all the countries, indicating that improvement in terms of trade trigger increases in export performance in the WAMZ countries. Income from the rest of the world is found to have a p...
The fundamental objective of this study is to empirically explore the macroeconomic factors that ... more The fundamental objective of this study is to empirically explore the macroeconomic factors that explain variations in migrant remittance inflows to Sub-Saharan Africa (SSA). In doing this, the paper sampled 38 out of 48 SSA countries for which consistent balanced panel data can be constructed for the period 2000-2009. The Blundell-Bond system GMM dynamic panel data analytical framework was adopted. The results show that migrant remittances are largely driven by altruism, a signal that the sub-region has not been able to attract more ‘self-interest remittances’, probably due to unattractive investment climate arising out of implementation of unsound macroeconomic policies. The key macroeconomic determinants of remittance flows, measured as a percentage of GDP, are home-country income, host-country income, income differential, inflation, real interest rate differential, real exchange rate depreciation, private sector credit, institutional quality and remittance inflows inertia. While...
This study estimates the threshold level and the optimal range of inflation conducive for economi... more This study estimates the threshold level and the optimal range of inflation conducive for economic growth in the West African Monetary Zone (WAMZ) with focus on Nigeria and Ghana. By an extension, the study endeavours to identify the determinants and direction of growth in these economies. The empirical model formulated is non-linear, reflecting the structure of the economies under study and requiring a conditional least squares estimation technique that has been widely used to estimate optimal inflation for both developed and developing economies. The findings strongly suggest the existence of threshold inflation levels for both countries, but not at the single digit that the WAMZ inflation convergence criterion dictates. The estimated optimal inflation ranges, however, indicate that the two countries can comply with the WAMZ single-digit inflation criterion without any significant loss of real GDP growth. The results are useful for policymakers in providing some clues in setting a...
In this paper we analyzed a dynamic cross-country panel dataset on 31 sampled developing countrie... more In this paper we analyzed a dynamic cross-country panel dataset on 31 sampled developing countries involving 16 Latin America and the Caribbean, and 15 Sub-Sahara African countries within the framework of Blundell-Bond Generalized Method of Moments (GMM). Our results show that generally the impact of remittance inflows on overall development differ across regions. Specifically, the paper reveals that the positive role of international remittances in the development process of underdeveloped economies is more pronounced in Sub-Saharan Africa than in Latin America and the Caribbean sub-region where remittances actually retard socioeconomic development prospects. It would, therefore, be politically imprudent and economically suicidal, to over-depend on international remittances as the panacea for the underdevelopment of Sub-Saharan Africa, Latin America and the Caribbean. The contribution of this paper is unique because it has examined the long-run impact of international remittances o...
Poverty is a multi-dimensional problem that manifests itself as either physiological or social de... more Poverty is a multi-dimensional problem that manifests itself as either physiological or social deprivation or both. It has root causes spanning cultural, social, economic and political spheres. However, poverty measurements have concentrated on consumption or economic poverty. Recent United Nations’ report indicates that while proportion of people living below the extreme poverty line of US$1.25 a day in Sub-Saharan Africa (SSA) declined over the period 1990 – 2010, the number of extreme poor rose in absolute terms. This paper examines the role that the economy can play in poverty reduction. It identifies three channels through which the economy can affect poverty. These are the growth, income distribution and efficiency channels. It also highlights the economic conditions and policies needed for poverty reduction.
Remittances, Exchange Rate, and Monetary Policy in Ghana. by. Deodat E. Adenutsi 1 and Christian ... more Remittances, Exchange Rate, and Monetary Policy in Ghana. by. Deodat E. Adenutsi 1 and Christian RK Ahortor 2. ABSTRACT. Within the context of the Ghanaian macroeconomy, this paper explores the monetary factors underlying ...
The study investigates the effect of changes in the exchange rate on output growth and inflation ... more The study investigates the effect of changes in the exchange rate on output growth and inflation in the WAMZ economies. It formulates an open-economy general equilibrium model which highlights the interrelationships among real GDP growth, inflation, exchange rate depreciation/ appreciation and money supply growth. Employing quarterly data series for the period 1981Q1 to 2010Q4 for all countries except Ghana (1983Q2 to 2010Q4) and Guinea (1989Q1 to 2010Q4), the study uses the vector autoregressive (VAR) model to estimate the impulse response functions and variance decompositions for inflation and output in order to determine how inflation and output respond to changes in the exchange rate, and what proportion of inflation and output variance can be explained by the exchange rate. The results of the study suggest that exchange rate had significant impact on inflation in all the Member States. The results reveal a negative relationship between real exchange rate and real GDP growth for...
This paper examines the relationship between exchange-rate volatility and export performance in t... more This paper examines the relationship between exchange-rate volatility and export performance in the WAMZ countries using quarterly data for the period 1990-2010. The paper utilizes the Engel-Granger Dynamic OLS (DOLS) estimation technique as well as the Generalized Auto Regressive Conditional Heteroskedasticity (GARCH) approach to model the real exchange rate volatility. In conformity with theoretical considerations, the results indicate that increases in the exchange-rate volatility exert a significant negative effect upon export in Liberia, Nigeria and Sierra Leone. While a positive relationship is established in the case of The Gambia, exchange-rate volatility impact on Ghana and Guinea is insignificant. The results also reveal a positive relationship between terms of trade and export performance for all the countries, indicating that improvement in terms of trade trigger increases in export performance in the WAMZ countries. Income from the rest of the world is found to have a p...
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