engleski

Macroeconomic Effects of Workers’ Remittances: Evidence from the Western Balkan Countries

Workers’remittances have been in the focus of researchers and policy makers for years due to their magnitude and positive impact on a micro and a macro level. However, the interest in this topic has resurged recently as a result of the upward trend of migrant remittances and especially of the striking increase of remittance inflows to the developing countries. Workers’ remittances are an extremely important source of external financing for most of the Western Balkan countries. During the latest global financial crisis, they helped these countries to maintain their foreign exchange reserves stable and to decrease their current account deficits. This study aims to investigate the macroeconomic effects of remittances sent to the Western Balkan countries, especially in times of financial shocks, such as the latest global economic and financial crisis 2008/2009. To achieve this objective, we estimate a model with fixed effects of period using panel quarterly data on migrant remittances per capita as a dependent variable and gross domestic product (GDP) per capita, gross monthly wages, unemployment rates, consumer price indices’ and total imports of goods as explanatory variables for four Western Balkan countries (Macedonia, Croatia, Serbia and Albania) over the period 2007-2015.

Migration, workers’ remittances, macroeconomic effects, panel data, the Western Balkan countries

Acknowledgment: This work has been fully supported by Croatian Science Foundation under the project STatistical Modelling for REspoNse to Crisis and Economic GrowTH in WeStern Balkan Countries -STRENGTHS (project no. HRZZ-IP-2013-11-9402)