{"title":"Economic policy uncertainty and remittances: mediating role of foreign exchange rate","authors":"Waqas Bin Khidmat, Nayar Rafique, Muhammad Umar","doi":"10.1007/s10644-024-09725-7","DOIUrl":null,"url":null,"abstract":"<p>Recent studies provide evidence that economic policy uncertainty (EPU) is linked with the workers' remittances, yet the channel through which EPU affects the workers' remittances has been less explored. To understand the above said channel, this study uses monthly data from Pakistan, which ranges from January 2015 to November 2022. Based on the results obtained by using different econometric techniques, this study provides evidence that the foreign exchange rate mediates the relationship between EPU (both global and domestic) and workers' remittances. Additionally, it finds that the domestic EPU mediates the relationship between the global EPU and the exchange rate. Interestingly, the results highlight the limited influence of altruistic motives on remittances instead the findings suggest the prevalence of self-interest as the dominant driving factor behind workers’ remittances in the case of Pakistan. The findings of this study have implications for policymakers and stakeholders in formulating effective strategies to harness the potential of workers’ remittances for economic development and welfare enhancement in Pakistan.</p>","PeriodicalId":46127,"journal":{"name":"Economic Change and Restructuring","volume":"76 1","pages":""},"PeriodicalIF":4.0000,"publicationDate":"2024-06-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economic Change and Restructuring","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1007/s10644-024-09725-7","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
Recent studies provide evidence that economic policy uncertainty (EPU) is linked with the workers' remittances, yet the channel through which EPU affects the workers' remittances has been less explored. To understand the above said channel, this study uses monthly data from Pakistan, which ranges from January 2015 to November 2022. Based on the results obtained by using different econometric techniques, this study provides evidence that the foreign exchange rate mediates the relationship between EPU (both global and domestic) and workers' remittances. Additionally, it finds that the domestic EPU mediates the relationship between the global EPU and the exchange rate. Interestingly, the results highlight the limited influence of altruistic motives on remittances instead the findings suggest the prevalence of self-interest as the dominant driving factor behind workers’ remittances in the case of Pakistan. The findings of this study have implications for policymakers and stakeholders in formulating effective strategies to harness the potential of workers’ remittances for economic development and welfare enhancement in Pakistan.
期刊介绍：
Economic Change and Restructuring has been accepted for SSCI and will get its first Impact Factor in 2020!Since the early 1990s fundamental changes in the world economy, under the auspices of increasing globalisation, have taken place
On one hand, the disappearance of the centrally planned economies and the progressive formation of market-oriented economies, have brought about countless systematic changes, where new economic structures, institutions, competences and skills involve complex processes, changes which are still underway and which necessitate adaptation and restructuring to form competitive market economies.
On the other hand, many developing economies are making great strides as regards economic reform and liberalisation, and are emerging as new global players. They show an innovative capacity to position themselves in the global economy and to compete with industrialised countries, which are generally believed to be witnessing the rapid erosion of their established positions. These developments are accompanied by the exacerbation of the world competition.
Both processes involve transition and the emerging economies, in searching for a new role and scope for public policies and for a new balance between public and private partnership, seem to currently be converging, especially with respect to the policies needed to create appropriate and effective market institutions and integrated reform policies, and to increase the standards of the population''s education levels.
Thus, liberalisation and development policies, in attempting to strike a difficult balance between social and environmental needs, must be integrated more coherently. This complexity calls for new analytical and empirical approaches that can explain these new phenomena, which often go beyond the over-simplified facts and conventional ''wisdom'' that emerged at the start of the transition in the early 1990s.
Economic Change and Restructuring (formerly ''Economics of Planning''), by keeping abreast of developments affecting both transitional and emerging economies, is aimed to attract original empirical and policy analysis contributions that are focused on various issues, including macroeconomic analysis, fiscal issues, finance and banking, industrial and trade development, and regional and local development issues.
The journal aspires to publish cutting edge research and to serve as a forum for economists and policymakers working in these fields.Officially cited as: Econ Change Restruct
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