Article

 

Emigrants’ remittances and economic growth in small transition economies: The cases of Moldova and Albania (p.97-117)

by

Anastasia Blouchoutzi, University of Western Macedonia, Greece

Christos Nikas, University of Western Macedonia, Greece

Keywords : Moldova, Albania, Emigrant’s remittances, Economic growth, Keynesian macroeconomic modeling

JEL classification : J61, F22, F24

Abstract

The breakdown of the socialist system led to large-scale emigration outflows. These flows in turn, led to massive inflows of remittances to the emigration transition economies. Remittances are considered to be the basic gain of migration for the emigration countries and their main compensation for losing a part of their labour force. Whether remittances contribute to the economic development and growth of the country receiving them depends on the way they are used, that is what activities they finance. There are examples of countries that use them for productive investment which is considered more development-stimulating than consumption or imports. This paper investigates the macroeconomic effects of remittances in two small, transition emigration countries namely Moldova and Albania. The econometric investigation, based on time series analysis and Keynesian macroeconomic modeling, examines the impact of remittances on three key macroeconomic variables of these economies: consumption, imports and investment.