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Do Workers' Remittances Matter for the Egyptian Economy?
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M. Sayed Abou Elseoud   |
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Abstract: (6864 Views) |
| Workers’ remittances constitute one of the most important sources of external finance for
many developing countries. Although it shows a decreasing trend in recent years, Egypt after 1970s
with her regular and massive labor migration to abroad has been still one of the gainer
countries on remittances across the world. Empirical studies that implemented for various
countries reveal workers’ remittances may have increasing, decreasing or neutral effects on economic
growth and other macroeconomic variables. The current study aims at investigating the impact of
workers’ remittances on the major macroeconomic variables in the Egyptian economy during the
period (1991-2011) by employing Cointegration, Error Correction Model and Granger Causality
techniques. The main findings show the existence of cointegration between workers' remittances and
the macroeconomic variables also there are unidirectional causality runs from workers' remittances to
private capital formation, total exports, total imports, money supply and exchange rate, while there is
bidirectional causality between workers' remittances and each of private consumption, government
spending, and economic growth. The study suggests that the Egyptian management authorities need to
formulate appropriate conducive polices for encouraging Egyptian migrants to hold savings in
financial assets in Egypt rather than abroad (or spending their savings on consumer goods) and
redirecting remittances to official channels, Facilitating investment opportunities to migrants for selfemployment
and enterprise creation in Egypt, and using remittances in a way that generates a
maximum developmental impact of remittances in Egypt. |
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Full-Text [PDF 210 kb]
(3939 Downloads)
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Type of Study: Research |
Subject:
Special
Received: 2014/04/15 | Accepted: 2014/04/15 | Published: 2014/04/15
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