“Dynamic Effects of Migrant Remittances on Growth: An Econometric Model with an Application to Mediterranean Countries”. Discussion Paper, No. 74, KEPE, Athens, 2002.

This paper builds a Keynesian type econometric model with a dynamic perspective and a sound theoretical basis, for investigating the impact of remittances on consumption, investment, imports and output. It estimates short and long-run multiplier effects of exogenous shocks of remittances, with data from five Mediterranean countries. The analysis reveals a uniform country performance of instability and uncertainty, with great temporal and inter-country fluctuations of remittance effects. The findings point to different inter-country priorities of remittance spending and to an asymmetric impact of remittance changes, in the sense that the good done to growth by rising remittances is not as great as the bad done by falling remittances.Keywords: Migration, Remittances, Growth, Dynamic Model, Mediterranean Countries

The impact of demographic deterioration on labour balances in Greece

This paper investigates the impact of demographic deterioration on Greek labour supply, and the possible labour shortages that it may entail. Through a disaggregated approach by occupation and region, the paper predicts, for the year 2000, the new entry to and exit from the labour force, as well as labour requirements. Various methods are used, such as temporal shifts of youth and workers by age brackets for predicting net demographic additions to the labour force, shift and share analysis for decomposing employment changes, and the manpower requirements approach for predicting employment through output and productivity projections. The occupational and regional predictions are mostly done by top-down calculations. Finally, a formula is invented for measuring the occupational and regional intensity of demographic deficits. Despite the predicted demographic deficits in almost all regions of the country, immigrants and other additional workers to the job market will fill the demographic gap, but many of them will also remain unemployed.Demograpics, Employment, Greece, Labour market, Young people

The contribution of remittances to growth: A dynamic approach and empirical analysis

Purpose – The aim of this paper is to investigate the impact of exogenous shocks of remittances on consumption, investment, imports and output in five Mediterranean countries. Design/methodology/approach – This paper builds a Keynesian type econometric model with a dynamic perspective and a sound theoretical basis. The model is used for estimating short and long-run multipliers of remittances, through which the impact of remittances on growth and other key macroeconomic variables is estimated. Findings – The analysis reveals a uniform country performance of instability and uncertainty, with great temporal and inter-country fluctuations of remittance effects. The findings point to different inter-country priorities of remittance spending and to an asymmetric impact of remittance changes, in the sense that the good done to growth by rising remittances is not as great as the harm done by falling remittances. Research limitations/implications – In this paper the purpose is to examine the demand side impact of remittances and uses remittances as an exogenous variable in the model. A more comprehensive approach would probably be to consider jointly supply side elements and handle remittances as an endogenous variable to estimate feedbacks. Practical implications – The impacting shock of an increase or a drop of remittances is found not to be instantaneous, but is distributed over time smoothing out its effects on growth. This gives time for relevant policies to be adopted in case of emergencies in the remittance flows. The findings show that economies are weakly sheltered against the damaging impact of falling remittances. Consequently, countries with high remittances should be seriously taking them into consideration as a major pillar in planning a strategy for an overall development. Policy makers may carefully consider remittance induced imports, not necessarily to reduce them and turn them to domestic production, which may be inflationary, but to reshuffle them towards imports of investment goods. Originality/value – The value of this paper and its novelty is first, its methodological approach to build a new econometric model, based on a sound theoretical basis, for estimating the dynamic impact of remittances simultaneously on key macroeconomic variables; and second, the capability of the model to pinpoint similarities and divergences of remittance effects across countries and over time.Economic growth, Europe, Macroeconomics, Modelling