[go: up one dir, main page]

IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/hal-03429730.html
   My bibliography  Save this paper

Can Venezuelan scenario be repeated in Tunisia? The role of remittances in an inflationary context

Author

Listed:
  • Refk Selmi

    (ESC PAU - Ecole Supérieure de Commerce, Pau Business School)

  • Farid Makhlouf

    (ESC PAU - Ecole Supérieure de Commerce, Pau Business School)

Abstract
Over the past decade, remittances to Tunisia have increased significantly. Meantime, the Tunisian economy has grown by as little as 0.6 percent on average with inflation averaging six percent. With the harmful economic and social consequences of the COVID-19 crisis as well as the political unrest (especially after Tunisian President Kais Saied invoked Article 80 of the country's 2014 constitution to suspend parliament amid nationwide protests calling for the resignation of the government and the dissolution of the parliament), managing inflation risks seems growingly challenging. Our study is the first attempt to examine the relationship between remittances and Tunisia's inflation dynamics in the central and tail distributions over different correlation regimes. Particularly, we use a copula-based approach that sheds a new light on the dynamic dependence between inflation and remittances. This technique allows to control for possible asymmetries in the form of a high or crisis dependence and a low or a normal state dependence. Our results robustly reveal that remittances are prominent factor determining inflation in Tunisia. More interestingly, we show that remittances and inflation are more strongly correlated during high uncertainty conditions rather than low uncertainty regime. Such accurate insights on the dynamic relationship between remittances and inflation would allow the central bank to anticipate more effectively the evolution of inflation and to propose more appropriate instruments to control it in a context of high inflationary pressures and heightened political uncertainty.

Suggested Citation

  • Refk Selmi & Farid Makhlouf, 2021. "Can Venezuelan scenario be repeated in Tunisia? The role of remittances in an inflationary context," Working Papers hal-03429730, HAL.
  • Handle: RePEc:hal:wpaper:hal-03429730
    Note: View the original document on HAL open archive server: https://hal.science/hal-03429730
    as

    Download full text from publisher

    File URL: https://hal.science/hal-03429730/document
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Paresh Kumar Narayan & Seema Narayan & Sagarika Mishra, 2011. "Do Remittances Induce Inflation? Fresh Evidence from Developing Countries," Southern Economic Journal, John Wiley & Sons, vol. 77(4), pages 914-933, April.
    2. Christian Hubert Ebeke, 2011. "Remittances, Countercyclicality, Openness and Government Size," Recherches économiques de Louvain, De Boeck Université, vol. 77(4), pages 89-114.
    3. repec:dau:papers:123456789/5545 is not listed on IDEAS
    4. Azer Dilanchiev & Aligul Aghayev & Md. Hasanur Rahman & Jannatul Ferdaus & Araz Baghirli, 2021. "Dynamic Analysis for Measuring the Impact of Remittance Inflows on Inflation: Evidence From Georgia," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(1), pages 339-347, January.
    5. Acosta, Pablo A. & Lartey, Emmanuel K.K. & Mandelman, Federico S., 2009. "Remittances and the Dutch disease," Journal of International Economics, Elsevier, vol. 79(1), pages 102-116, September.
    6. Edelbloude, Johanna & Fontan Sers, Charlotte & Makhlouf, Farid, 2017. "Do remittances respond to revolutions? The Evidence from Tunisia," Research in International Business and Finance, Elsevier, vol. 42(C), pages 94-101.
    7. Christopher P. Ball & Claude Lopez & Javier Reyes, 2013. "Remittances, Inflation and Exchange Rate Regimes in Small Open Economies," The World Economy, Wiley Blackwell, vol. 36(4), pages 487-507, April.
    8. Roy, Ripon & Rahman, Md. Mokhlesur, 2014. "An empirical analysis of remittance – inflation relationship in Bangladesh: post-floating exchange rate scenario," MPRA Paper 55190, University Library of Munich, Germany.
    9. El-Sakka, M. I. T. & McNabb, Robert, 1999. "The Macroeconomic Determinants of Emigrant Remittances," World Development, Elsevier, vol. 27(8), pages 1493-1502, August.
    10. Ilene Grabel, 2008. "The Political Economy of Remittances: What Do We Know? What Do We Need to Know?," Working Papers wp184, Political Economy Research Institute, University of Massachusetts at Amherst.
    11. Farid Makhlouf & Kamal Kasmaoui, 2020. "Remittances and Business Cycle in Morocco," Economics Bulletin, AccessEcon, vol. 40(2), pages 1431-1445.
    12. Farid Makhlouf, 2019. "Is Productivity Affected by Remittances? The Evidence from Morocco," Journal of International Development, John Wiley & Sons, Ltd., vol. 31(2), pages 211-222, March.
    13. Funkhouser, Edward, 1992. "Migration from Nicaragua: some recent evidence," World Development, Elsevier, vol. 20(8), pages 1209-1218, August.
    14. Esteban Callejas Perez, 2021. "Do Remittances Affect Housing Prices in an Emerging Economy? A Study Case from Colombia," Working Papers ECARES 2021-08, ULB -- Universite Libre de Bruxelles.
    15. Farid Makhlouf & Refk Selmi, 2021. "The role of remittances in times of socio-political unrest: Evidence from Tunisia," Working Papers hal-03263815, HAL.
    16. Devesh KAPUR, 2004. "Remittances: The New Development Mantra?," G-24 Discussion Papers 29, United Nations Conference on Trade and Development.
    17. Luis Miotti & El Mouhoub Mouhoud & Joel Oudinet, 2010. "Determinants and Uses of Remittances to Southern and Eastern Mediterranean Countries: Insights from a New Survey," Development Working Papers 288, Centro Studi Luca d'Agliano, University of Milano, revised 30 Apr 2010.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jounghyeon Kim, 2019. "The Impact of Remittances on Exchange Rate and Money Supply: Does “Openness” Matter in Developing Countries?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 55(15), pages 3682-3707, December.
    2. Farid Makhlouf & Mazhar Mughal, 2013. "Remittances, Dutch Disease, And Competitiveness: A Bayesian Analysis," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(2), pages 67-97, June.
    3. Farid Makhlouf & Mazhar Mughal, 2013. "Remittances, Dutch Disease, And Competitiveness: A Bayesian Analysis," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(2), pages 67-97, June.
    4. Dennis W. Jansen & Diego E. Vacaflores, 2020. "Remittances, Output, and Exchange Rate Regimes: Theory with an Application to Latin America," Southern Economic Journal, John Wiley & Sons, vol. 86(3), pages 1170-1191, January.
    5. Junaid Ahmed & Mazhar Mughal & Inmaculada Martínez‐Zarzoso, 2021. "Sending money home: Transaction cost and remittances to developing countries," The World Economy, Wiley Blackwell, vol. 44(8), pages 2433-2459, August.
    6. Gnangnon, Sèna Kimm, 2023. "Duration of membership in the world trade organization and investment-oriented remittances inflows," The Quarterly Review of Economics and Finance, Elsevier, vol. 88(C), pages 258-277.
    7. Vacaflores, Diego E., 2018. "Are remittances helping lower poverty and inequality levels in Latin America?," The Quarterly Review of Economics and Finance, Elsevier, vol. 68(C), pages 254-265.
    8. Narcisse, Cha'ngom & Luc, Nembot Ndeffo & Isaac, Tamba, 2017. "Transferts de fonds des migrants et croissance économique : une analyse comparative entre le Cameroun et le Sénégal [Remittances and economic growth: a comparative analysis between Cameroon and Sen," MPRA Paper 91365, University Library of Munich, Germany.
    9. Farid Makhlouf & Mazhar Yasin Mughal, 2013. "Remittances, Dutch Disease, and Competitiveness: a Bayesian Analysis," Post-Print hal-01884858, HAL.
    10. Sena Kimm Gnangnon, 2019. "Remittances Inflows and Trade Policy," Remittances Review, Remittances Review, vol. 4(2), pages 117-142, October.
    11. Cazachevici, Alina & Havranek, Tomas & Horvath, Roman, 2019. "Remittances and Economic Growth: A Quantitative Survey," EconStor Preprints 205812, ZBW - Leibniz Information Centre for Economics.
    12. Edwin Le Heron & Nicolas Yol, 2019. "The macroeconomic effects of migrants' remittances in Moldova: a stock–flow consistent model," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 16(1), pages 31-54, April.
    13. Cazachevici, Alina & Havranek, Tomas & Horvath, Roman, 2020. "Remittances and economic growth: A meta-analysis," World Development, Elsevier, vol. 134(C).
    14. Diego E. Vacaflores, 2012. "Remittances, Monetary Policy, and Partial Sterilization," Southern Economic Journal, John Wiley & Sons, vol. 79(2), pages 367-387, October.
    15. Adnan KHURSHID & Yin KEDONG & Adrian Cantemir CĂLIN & Zhaosu MENG & Naila NAZIR, 2018. "Remittances Inflows, Gain of Foreign Exchange or Trade Loss? New Evidence from Low, Lower-Middle and Middle-Income Groups," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 20-41, December.
    16. Farid Makhlouf, 2014. "Propriétés cycliques des transferts de fonds des migrants marocains," Working Papers hal-01885146, HAL.
    17. Farid Farid, 2014. "The impact of exchange rate policy on remittances in Morocco: A Threshold VAR analysis," Economics Bulletin, AccessEcon, vol. 34(4), pages 2351-2360.
    18. repec:hal:spmain:info:hdl:2441/17g7senmu38qqa09nqh9tk9hbn is not listed on IDEAS
    19. Irfan Ahmad Shah, 2024. "The effect of remittances on the Indian economy," International Economics and Economic Policy, Springer, vol. 21(4), pages 771-785, October.
    20. Hathroubi, Salem & Aloui, Chaker, 2016. "On interactions between remittance outflows and Saudi Arabian macroeconomy: New evidence from wavelets," Economic Modelling, Elsevier, vol. 59(C), pages 32-45.
    21. repec:spo:wpmain:info:hdl:2441/17g7senmu38qqa09nqh9tk9hbn is not listed on IDEAS
    22. Nader NEFZI & Joël OUDINET & Mouez SOUSSI, 2020. "Transferts de fonds des migrants et mésalignement du change réel," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 51, pages 87-114.

    More about this item

    Keywords

    Inflation; Remittances; Tunisia; Political instability; Copula-based approach;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-03429730. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.