This article examines varying macroeconomic impacts of international emigrant remittances in Bangladesh since 1976 by using a vector auto-regression (VAR) framework. Bangladesh has recorded better economic performance during last two decades, 1996–2014, compared to earlier two decades, 1976–1995. The time-series analysis therefore uncovers some transition in the remittance impacts composed of the ‘Dutch Disease’ effect and the capital accumulation effect. The empirical results reveal the existence of the Dutch Disease effect for the first period, 1976–1995, but turned to show the positive impact on capital accumulation for the second period, 1996–2014. We speculate that the recent manufacturing-oriented policies together with institutional improvements have contributed to the transformation in the remittance impact towards a positive direction between two periods.
AcharyaC. P., & RobertoL.-G. (2013). The impact of remittance on poverty and inequality: A micro-simulation study for Nepal. Asian Journal of Empirical Research, 3(9), 1061–1080.
2.
AcostaP. A.CalderonC.FajnzylberP., & LopezH. (2008). What is the impact of international migrant remittances on poverty and inequality in Latin America?World Development, 36(1), 89–114.
3.
AcostaP. A.LarteyE. K. K., & MandelmanF. S. (2009). Remittances and the Dutch disease. Journal of International Economics, 79(1), 102–116.
4.
AdamsR., & PageJ. (2005). Do international migration and remittances reduce poverty in developing countries?World Development, 33(10), 1645–1669.
5.
AggarwalR.Demirguc-KuntA., & PeriaM. (2006). Do workers’ remittances promote financial development? (Policy Research Working Paper No. 3957). Washington, DC: World Bank.
6.
BhargavaA. (1986). On the theory of testing for unit roots in observed time series. Review of Economic Studies, 53(3), 369–384.
7.
BhattacharyaD.RahmanM., & RaihanA. (2002). Contribution of the RMG sector to the Bangladesh economy (CPD Occasional Paper Series No. 50). Dhaka: Centre for Policy Dialogue.
8.
BhuyanA. R. (2010). Bangladesh industrial policy 2010: A critical appraisal. Thoughts on Economics, 20(3), 1–16.
9.
BourdetY., & FalckH. (2006). Emigrants’ remittances and Dutch disease in Cape Verde. International Economic Journal, 20(3), 267–284.
10.
BrecherR. A., & AlejandroC. F. (1977). Tariffs, foreign capital and immiserizing growth. Journal of International Economics, 7(4), 317–322.
11.
ChowdhuryM. (2011). Remittances flow and financial development in Bangladesh. Economic Modelling, 28(6), 2600–2608.
12.
CordenW. M., & NearyJ. P. (1982). Booming sector and de-industrialization in a small open economy. Economic Journal, 92(368), 825–848.
13.
FayadG. (2011). Remittances: Dutch disease or export-led growth? (OxCarre Research Paper No. 57). Oxford: Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
14.
FrankelJ. A. (2010). The natural resource curse: A survey (NBER Working Paper No. w15836). New York, NY: NBER.
15.
GorlichD.OmarM., & ChristophT. (2007). Explaining labour market inactivity in migrant-sending families: Housework, hammock, or higher education? (Kiel Working Paper No. 1391). Kiel, Germany: Kiel Institute for the World Economy.
16.
IlzetzkiE.ReinhartC. M., & RogoffK. S. (2011). The country chronologies and background material to exchange rate arrangements into the 21st century: Will the anchor currency hold? Retrieved from http://personal.lse.ac.uk/ilzetzki/data/ERA-Country_Chronologies_2011.pdf
17.
LarteyE. K. K.MandelmanF. S., & AcostaP. A. (2012). Remittances, exchange rate regimes and the Dutch disease: A panel data analysis. Review of International Economics, 20(2), 377–395.
18.
NathN. C. (2012). Manufacturing sector of Bangladesh-growth, structure and strategies for future development. Paper presented at the Biennial Conference on Global Economy and Vision 2021, 12–14 July, Institution of Engineers, Dhaka.
19.
NgS., & PerronP. (2001). Lag length selection and the construction of unit root tests with good size and power. Econometrica, 69(6), 1519–1554.
20.
PhillipsP., & PerronP. (1988). Testing for unit root in time series regression. Biometrika, 75(2), 335–346.
21.
SaidS., & DickeyD. A. (1984). Testing for unit roots in autoregressive-moving average models of unknown order. Biometrika, 71(3), 599–607.
22.
Van der PloegF. (2011). Natural resources: Curse or blessing?Journal of Economic Literature, 49(2), 366–420.
23.
WoodruffC., & ZentenoR. (2001). Remittances and microenterprises in Mexico (Working Paper No. 43). San Diego, CA: Graduate School of International Relations and Pacific Studies, University of California.
24.
YangD. (2005). International migration, human capital, and entrepreneurship: Evidence from Philippine migrants’ exchange rate shocks (Policy Research Working Paper No. 3578). Washington, DC: World Bank.
