asset inequality matters an assessment of the world bank s approach to poverty reduction the fight against poverty has been adopted by the multilateral development banks as their principal objective almost three decades after robert mcnamara announced that the world bank s fundamental work was to improve the lives of the poor its new president james wolfensohn has reiterated that poverty reduction is the world bank s principal purpose similarly in 1994 the inter american development bank set social progress and social equity as its central objective the emphasis in the international institutions contrasts with disappointing results in the real world although life expectancy school enrollmuent and other indicators of social wellbeing have improved dramatically across the developing world and although the proportion of the poor has declined in the last few decades the absolute number of poor people in the world has actually increased today about 1 3 billion people in less developed countries still subsist on less than 1 per day world bank 1980 1990 1996 the case of latin america is dramatic while in the 1970 s the number of poor fell it nearly doubled in the 1980 s increasing from about 80 to almost 150 million and in the last few years the number of poor now 33 percent of the total population has failed to fall despite economic recovery birdsall and londofio 1997 the contrast between the multilateral banks goals and these disappointing results suggests the need for a critical reassessment of their approach to poverty reduction in this paper we describe the approach reflected in the work of world bank economists and based on new empirical work assess its relevance for latin america

labour migration and social networks participation in southern mozambique this paper investigates how social networks in poor developing settings are affected by migration using a unique household survey from southern mozambique we test the role of labour mobility in shaping participation in groups and interhousehold cooperation by migrant sending households in village economies at origin we find that migration cum remittances boosts household engagement in community based social networks our findings are robust to alternative definitions of social interaction and to endogeneity concerns suggesting that stable migration ties and higher income stability through remittances may decrease participation constraints and increase household commitment in cooperative arrangements in migrant sending communities

remittance and financial inclusion in refugee migrants inverse probability of treatment weighting using the propensity score abstractthis paper investigates the impact on remittances on financial inclusion of refugee migrants while financial inclusion is gaining traction in the humanitarian and development literature t

genco s risk constrained hydrothermal scheduling this paper presents a stochastic midterm risk constrained hydrothermal scheduling algorithm in a generation company genco the objective of a genco is to maximize payoffs and minimize financial risks when scheduling its midterm generation of thermal cascaded hydro and pumped storage units the proposed schedule will be used by the genco for bidding purposes to the iso the optimization model is based on stochastic price based unit commitment the proposed genco solution may be used to schedule midterm fuel and natural water inflow resources for a few months to a year the proposed stochastic mixed integer programming solution considers random market prices for energy and ancillary services as well as the availability of natural water inflows and generators in monte carlo scenarios financial risks associated with uncertainties are considered by applying expected downside risks which are incorporated explicitly as constraints variable time steps are adopted to avoid the exponential growth in solution time and memory requirements when considering midterm constraints a single water to power conversion function is used instead of several curves for representing water head and discharge parameters piecewise linearized head dependant water to power conversion functions are used for computational efficiency illustrative examples examine gencos midterm generation schedules risk levels fuel and water usage and hourly generation dispatches for bidding in energy and ancillary services markets the paper shows that gencos could decrease their financial risks by adjusting expected payoffs

international migration the brain drain and poverty a cross country analysis the aim of the paper is threefold first it empirically investigates the effect of international migration on poverty in origin countries using data from a cross country analysis second it explores the specific part of the income distribution from which migrants are drawn by comparing the effect of international migration on different income quintiles of the population finally given that the selection of migrants depends not only on the income level of their households but also on the skill levels of movers the paper casts some light on the implications of the emigration of skilled workers on poverty this article shows that the stock of international migrants have a positive effect on the income of the poor while it does not have a significant impact on the income of the middle and top quintiles of the population in particular a 10 per cent increase in the per capita stock of migrants resident in oecd nations augments the income of the poor by 1 per cent on average and ceteris paribus finally the poverty reducing effect of migration holds even when the emigration process selects the best and the brightest

a gravity model analysis of international migration to north america this study examines the influence of political economic and demographic factors on the size and composition of migration flows to north america a modified gravity model is specified and adjusted to include immigration regulations and characteristics specific to the origin and destination countries for empirical test of the model the time period of study is from 1976 1986 and 70 countries are covered for a total of 1540 observations of migration flows to canada and the usa the results reveal that the population of origin countries and the income of destination countries are two major determinants of migration to north america high population areas of asia and latin america provided a large share of the immigrants domestic restrictions on political and civil freedom in origin countries are found to significantly impair migration to north america

do workers remittances reduce the probability of current account reversals the authors combine the literature on financial crises in emerging markets and developing economies with that on international migrations by investigating whether the increasingly large flows of workers remittances can help reduce the probability of current account reversals the rationale for this stands in the great stability and low cyclicality of remittances as compared with other private capital flows these properties combined with the fact that remittances are cheap inflows of foreign currencies might reduce the probability that foreign investors suddenly flee out of emerging markets and developing economies and trigger a dramatic current account adjustment the authors find that remittances can have such a beneficial effect in particular they show that a high level of remittances as a ratio of gdp makes the relationship between a decreasing stock of international reserves over gdp and a higher probability of current account crises less stringent the same occurs though less neatly for the positive relationship between an increasing stock of external debt over gdp and the probability of current account reversals the results point also to a threshold effect of remittances the mechanisms just described are in fact much stronger when remittances are above 3 percent of gdp

the trade balance and real exchange rate under currency substitution abstract it is demonstrated that the calvo and rodriguez 1977 results hold up in a utility maximizing model contrary to the claim of liviatan 1981 it is argued that liviatan s conclusions are based on a mistaken assumption having rescued calvo rodriguez from liviatan it is then shown that the calvo rodriguez results are dependent on two special assumptions that there is only one foreign asset traded and its real return is zero the paper also shows that there is an avenue for foreign inflation transmission under perfectly floating exchange rates even when goods prices are perfectly flexible however the direction of response of real variables is in general ambiguous

remittances financial development and growth abstract despite the increasing importance of remittances in total international capital flows the relationship between remittances and growth has not been adequately studied this paper studies one of the links between remittances and growth in particular how local financial sector development influences a country s capacity to take advantage of remittances using a newly constructed dataset for remittances covering about 100 developing countries we find that remittances boost growth in countries with less developed financial systems by providing an alternative way to finance investment and helping overcome liquidity constraints this finding controls for the endogeneity of remittances and financial development does not depend on the particular measure of financial sector development used and is robust to a number of robustness tests including threshold estimation we also provide evidence that there could be an investment channel trough which remittances can promote growth especially when the financial sector does not meet the credit needs of the population

do remittances facilitate a sustainable current account we examine how workers remittances impact on the current account in doing so we focus on how remittances affect the sustainability rather than the size of current account balances we find that the presence of remittances makes it more likely that exports and imports are cointegrated thereby lending support to current account sustainability furthermore quantile regression analysis suggests that increased remittances are associated with a faster speed of current account adjustment towards long run equilibrium particularly for those countries characterised by already highly persistent current account balances in contrast to a literature that emphasises an adverse dutch disease impact of workers remittances on the real exchange rate in terms of reduced external competitiveness our findings suggest that remittances are actually beneficial to the current account balance

sovereign credit ratings growth volatility and the global financial crisis using monthly data from january 1996 to may 2010 for a panel of 76 developed and emerging economies and adopting an instrumental variable iv estimation technique by correcting for both heterogeneity and endogeneity with the generalized two stage least squares g2sls ec2sls procedure method suggested by balestra and varadharajan krishnakumar 1987 and baltagi and li 1995 this article provides empirical evidence that volatility of per capita gdp growth is reduced when there are positive changes in credit ratings in other words when sovereign credit risk improves to deal with potential simultaneity between sovereign credit ratings and output volatility a system 3sls approach is undertaken and our findings remain robust by weakening the volatility dampening effects of ratings changes it is found that the global financial crisis gfc has enhanced macroeconomic volatility one of the channels via which sovereign rating changes affect growth volatility is the financial markets repricing of sove

remittances and the real effective exchange rate we examine the long run relationship between remittances and the real exchange rate for less developed countries in a key departure from the literature we employ a panel cointegration approach using an innovative method for the measurement of the multilateral real effective exchange rate and we focus on high remittance economies we find a small inelastic but significant long run relationship which confirms a dutch disease type effect the short run relationship is explored using a panel vector error correction model which confirms that short run causality is unidirectional running from remittances to the exchange rate potential asymmetries in this relationship are identified using quantile regression analysis

remittances finance and growth does financial development foster the impact of remittances on economic growth abstract there is no consensus in the literature regarding the long run impact of remittances on economic growth previous studies have shown that it might be related to financial development in the transfer receiving country but the direction of the link remained unclear i contribute to this literature by using a newly created index of overall financial development and two different estimation methods i measure the importance of remittances given financial development for economic growth in developing countries as there is no widely accepted measure of financial sector development i estimate an index of overall financial conditions it is created by means of an unobserved components model and used to determine the relevance of the financial sector as a transmission channel for remittances to affect economic growth i show that the more financially developed a country is the smaller the impact of remittances on economic growth remittances can foster growth but the effect is significant only at low levels of financial development this is in line with previous studies which found remittances and financial development to be substitutes however the interaction between the two factors becomes weaker once size depth and efficiency of the financial sector are taken into account my results suggest that while attracting migrants transfers can have important short run poverty alleviating advantages in the long run it might be more beneficial for governments to foster financial sector development

scenario reduction for futures market trading in electricity markets to make informed decisions in futures markets of electric energy stochastic programming models are commonly used such models treat stochastic processes via a set of scenarios which are plausible realizations throughout the decision making horizon of the stochastic processes the number of scenarios needed to accurately represent the uncertainty involved is generally large which may render the associated stochastic programming problem intractable hence scenario reduction techniques are needed to trim down the number of scenarios while keeping most of the stochastic information embedded in such scenarios this paper proposes a novel scenario reduction procedure that advantageously compares with existing ones for electricity market problems tackled via two stage stochastic programming

monetary and commercial policy in a two country flexible exchange rate model with perfect capital mobility abstract a two country portfolio balance model is developed in this paper in order to analyse the international transmission of monetary and commercial policy disturbances under a flexible exchange rate regime particular emphasis is placed on the role of capital mobility differences in the asset demand functions across countries and national net asset positions in determining the effects of these policies on the macroeconomic variables of the two countries both the short and the long run effects are considered with expectations assumed to be formed rationally

economic growth inequality and poverty estimating the growth elasticity of poverty summary this paper uses a new data set of 126 intervals from 60 developing countries to analyze the growth elasticity of poverty that is how much does poverty decline in percentage terms with a given percentage rise in economic growth the data set is both broader in coverage and more selective in terms of quality controls than those used in the past the study finds that while economic growth does reduce poverty in developing countries the rate of poverty reduction depends very much on how economic growth is defined controlling for changes in income inequality when economic growth is measured by changes in survey mean income consumption the growth elasticity of poverty excluding eastern europe and central asia is 2 79 that is a 10 increase in the survey mean will reduce poverty 1 00 person day by 27 9 but when growth is measured by changes in gdp per capita the growth elasticity of poverty is a statistically insignificant 2 27 which is lower than has previously been estimated

for health strength and daily food the dual impact of remittances and public health expenditure on household health spending and child health outcomes abstractchild and infant mortality in developing countries decreased 33 5 per cent and 30 9 per cent respectively during 1995 2009 while remittances and public health spending more than doubled i examine how remittances and government health spending improve these child health outcomes neither government health spending nor remittances causally affect household health spending public health spending has an insignificant negative impact on mortality the increase in remittances causally accounts for 32 per cent and 37 per cent of the decline in child and infant mortality respectively remittances reduce mortality through improved living standards from the relaxation of households budget constraints

workers remittances and the real exchange rate a paradox of gifts abstract we test the impact of workers remittances on the real exchange rate using a panel of 13 latin american and caribbean countries the analysis reveals that workers remittances have the potential to inflict economic costs on the export sector of receiving countries by reducing its international competitiveness our findings raise concerns parallel to those raised by dutch disease or resource boom models where resource discoveries result in real exchange rate appreciation and shifting of resources from the traded to the nontraded sectors of the economy

economic effects of migration on the left behind in cambodia abstractusing propensity score matching this study examines the effects of migration on various indicators of household wellbeing in cambodia the results indicate that migration would reduce poverty headcount rate by 3 7 percentage points and decrease the depth of poverty migration is also found to reduce by 5 10 per cent the hours worked by members left behind the impact of migration on labour participation may be however vulnerable to unobservable factors nevertheless the study suggests that important heterogeneous effects which differ from the average impact exist the analysis is conducted separately by internal and international migration

short term transmission line maintenance scheduling in a deregulated system in this paper the authors present a decomposition approach based on duality theory for line maintenance scheduling with transmission and voltage constraints the given formulation consists of a master program and sub problems with two independent programming in the master problem the maintenance problem is solved and in the subproblems the transmission and voltage problems are solved independently since canceling a transaction or purchasing reactive power relates to the loss of revenue the trade off between maintenance cost and revenue loss will be optimized in the proposed method the test results on the modified ieee 118 bus system demonstrate that limits on transmission and voltage affect the line maintenance scheduling and increase the maintenance cost while introducing the loss of revenue as one of the objective functions the proposed method is flexible enough to accommodate various pricing objectives and methods

stochastic security constrained unit commitment this paper presents a stochastic model for the long term solution of security constrained unit commitment scuc the proposed approach could be used by vertically integrated utilities as well as the isos in electricity markets in this model random disturbances such as outages of generation units and transmission lines as well as load forecasting inaccuracies are modeled as scenario trees using the monte carlo simulation method for dual optimization coupling constraints among scenarios are relaxed and the optimization problem is decomposed into deterministic long term scuc subproblems for each deterministic long term scuc resource constraints represent fuel and emission constraints in the case of vertically integrated utilities and energy constraints in the case of electricity markets lagrangian relaxation is used to decompose subproblems with long term scuc into tractable short term mip based scuc subproblems without resource constraints accordingly penalty prices lagrangian multipliers are signals to coordinate the master problem and small scale subproblems computational requirements for solving scenario based optimization models depend on the number of scenarios in which the objective is to minimize the weighted average generation cost over the entire scenario tree in large scale applications the scenario reduction method is introduced for enhancing a tradeoff between calculation speed and accuracy of long term scuc solution numerical simulations indicate the effectiveness of the proposed approach for solving the stochastic security constrained unit commitment

determinants of workers remittances an empirical investigation for a panel of eleven developing asian economies we explore the key motives of migrant workers remittances from abroad for 11 major asian migrant sending countries using panel regressions we find that relative higher growth rate interest rate and capital market returns of home over the host investment financial deepening at home have significant impact on remittance inflows into asia along with higher per capita incomes and international crude oil prices with incorporation of per capita incomes and lagged impact of remittances we observe an emergence of consumption motives to remit therefore we conclude that both investment and altruistic motives are the driving forces for remittances inflows into the asian economies

international migration workers remittances and permanent income hypothesis summary studies that examine the long run impact of remittances on economic growth in west africa and the caribbean show that remittances are not growth enhancing money has been used toward consumption rather than investment because migrants from these regions are mostly permanent immigrants who settle in the host countries we ask if there is a difference for south asia where migrant workers are flooding for short term temporary contracts in the middle eastern countries the permanent income hypothesis states that a permanent increase in income raises current consumption while transitory income increase is saved or smoothed over a life time we argue that the transitory income remitted by short term migrants is invested to generate future income when they return we examine a panel data of five south asian countries bangladesh india nepal pakistan and sri lanka for a period from 1975 to 2011 using panel cointegration and pooled mean group pmg estimation of dynamic heterogeneous panels we show that there is a long run significant impact of workers remittances on income while the impact on consumption is not significant a one percent increase in remittance receipt per person raises per capita income by approximately 0 23 the results are robust across different tests

remittances and financial access is there really a link and for whom evidence from mexican household data in policy discussions it has frequently been claimed that migrants remittances could function as a catalyst for financial access among receiving households this paper provides empirical evidence on this hypothesis from mexico a major receiver of remittances worldwide using the mexican family life survey panel mxfls for 2002 and 2005 the results from the fixed effects logit model show that receiving remittances is strongly correlated with the ownership of savings accounts and to a limited degree with the availability of borrowing options effects are particularly important for microfinance institutions and more important for rural households compared to urban households

migrant remittances and fertility abstractthis study examines the role of migrants remittances in developing countries fertility transition employing an unbalanced panel of south asian countries and controlling for various economic and socio demographic factors we find that remittances are significantly associated with a lower number of children born to women of childbearing age this suggests the remittances substitution effect to be at play rather than the income effect and may result from decreased need for children for financing the household s future needs as well as from better access to healthcare and contraceptive methods available to migrant households remittances association with fertility appears to be more important than the transfer of fertility norms from migrants host countries the monetary aspects of international migration may therefore be more important for the region s demographic transition than social remittances

do international migration and remittances reduce poverty in developing countries summary few studies have examined the impact of international migration and remittances on poverty in the developing world this paper fills this lacuna by constructing and analyzing a new data set on international migration remittances inequality and poverty from 71 developing countries the results show that both international migration and remittances significantly reduce the level depth and severity of poverty in the developing world after instrumenting for the possible endogeneity of international migration and controlling for various factors results suggest that on average a 10 increase in the share of international migrants in a country s population will lead to a 2 1 decline in the share of people living on less than 1 00 per person per day after instrumenting for the possible endogeneity of international remittances a similar 10 increase in per capita official international remittances will lead to a 3 5 decline in the share of people living in poverty

can the world cut poverty in half how policy reform and effective aid can meet international development goals abstract poverty in the developing world will decline by about one half by 2015 if the trends of the 1990s persist most of this poverty reduction will occur in asia however while poverty will decline only slightly in africa effective aid could make a contribution to greater poverty reduction in lagging regions even more potent would be significant policy reform in these countries we develop a model of efficient aid in which flows respond to policy improvements that create a better environment for poverty reduction and effective aid we investigate scenarios of policy reform and efficient aid that point the way to how the world can cut poverty in half in every major region

remittances and financial inclusion evidence from el salvador this paper investigates the impact of remittances on financial inclusion this is an important issue given recent studies showing that financial inclusion can have significant beneficial effects on households using household level survey data for el salvador the authors examine the impact of remittances on households use of savings and credit instruments from formal financial institutions they find that although remittances have a positive impact on financial inclusion by promoting the use of deposit accounts they do not have a significant and robust effect on the demand for and use of credit from formal institutions if anything by relaxing credit constraints remittances might reduce the need for external financing from financial institutions while at the same time increasing the demand for savings instruments

genco s risk based maintenance outage scheduling this paper presents a stochastic model for the optimal risk based generation maintenance outage scheduling based on hourly price based unit commitment in a generation company genco such maintenance outage schedules will be submitted by gencos to the iso for approval before implementation the objective of a genco is to consider financial risks when scheduling its midterm maintenance outages the genco also coordinates its proposed outage scheduling with short term unit commitment for maximizing payoffs the proposed model is a stochastic mixed integer linear program in which random hourly prices of energy ancillary services and fuel are modeled as scenarios in the monte carlo method financial risks associated with price uncertainty are considered by applying expected downside risks which are incorporated explicitly as constraints this paper shows that gencos could decrease financial risks by adjusting expected payoffs illustrative examples show the calculation of genco s midterm generation maintenance schedule risk level hourly unit commitment and hourly dispatch for bidding into energy and ancillary services markets

security constrained unit commitment with ac constraints in a restructured power market the independent system operator iso executes the security constrained unit commitment scuc program to plan a secure and economical hourly generation schedule for the day ahead market this paper introduces an efficient scuc approach with ac constraints that obtains the minimum system operating cost while maintaining the security of power systems the proposed approach applies the benders decomposition for separating the unit commitment uc in the master problem from the network security check in subproblems the master problem applies the augmented lagrangian relaxation lr method and dynamic programming dp to solve uc the subproblem checks ac network security constraints for the uc solution to determine whether a converged and secure ac power flow can be obtained if any network violations arise corresponding benders cuts will be formed and added to the master problem for solving the next iteration of uc the iterative process will continue until ac violations are eliminated and a converged optimal solution is found in this paper a six bus system and the ieee 118 bus system with 54 units are analyzed to exhibit the effectiveness of the proposed approach

impact of natural gas system on risk constrained midterm hydrothermal scheduling this paper studies the impact of natural gas ng contracts and constraints on a genco s midterm risk constrained hydrothermal scheduling problem the ng contracts and constraints are modeled as a set of linear equations the proposed model utilizes the stochastic price based unit commitment pbuc the pbuc hourly solution considers uncertainties of market prices for energy and ancillary services uncertainties of natural water inflows and random ng infrastructure interruptions in monte carlo scenarios illustrative examples analyze the genco s risk levels when considering midterm schedules for generating units target payoffs and usages of water inflow ng and other thermal resources simulation results show that a genco s midterm schedules and financial risks could be impacted significantly with the consideration of ng contracts and constraints

revisiting the threshold effect of remittances on total factor productivity growth in south asia a study of bangladesh and india abstractboth bangladesh and india are among the top recipient of remittances in absolute terms however in relative terms remittances as a per cent of gdp the two countries stand at 6 1 and 2

arima models to predict next day electricity prices price forecasting is becoming increasingly relevant to producers and consumers in the new competitive electric power markets both for spot markets and long term contracts price forecasts are necessary to develop bidding strategies or negotiation skills in order to maximize benefit this paper provides a method to predict next day electricity prices based on the arima methodology arima techniques are used to analyze time series and in the past have been mainly used for load forecasting due to their accuracy and mathematical soundness a detailed explanation of the aforementioned arima models and results from mainland spain and californian markets are presented

remittances and public finances evidence from oil price shocks we study the effect of inflowing remittances a major source of capital for many countries on tax revenues and tax policy instrumenting remittances with changes in the oil price interacted with a country s distance to oil producing countries we find that remittances have a large positive effect on vat revenues but no effect on income tax revenues this suggests that remittances often escape the income tax but can be taxed via consumption we further show that tax policy is responsive to shocks in incoming remittances remittances make the adoption of vat systems more likely and they lead to lower vat rates and higher income tax rates

why do migrants remit this paper examines primary incentives of remitting using estimated bilateral data on remittances this paper demonstrates that a rise in the home remittance receiving country s gross national income gni per capita leads to fewer remittances and that a rise in the host remittance sending country s gni per capita motivates migrants to remit more real exchange rates and real interest rates have no effect on remittances these results indicate that altruism is an important and critical component of motivations behind remittances however altruism alone does not appear to be a sufficient explanation of the motivations behind remittances other incentives such as loan repayment and investment play a non negligible role in this regard as well the degree of altruism is higher for migrants from developing countries in comparison with migrants from developed countries and it is higher when we define remittances as personal transfers rather than personal transfers and compensation of employees the results of the vector error correction model show if remittances deviate from the equilibrium relationship they will eventually revert

on the causal nexus of remittances and poverty reduction in bangladesh the aim of this article is to investigate the causal relationship between remittances and poverty reduction in bangladesh over the period 1976 to 2010 this issue is of fundamental importance for the developing economy of bangladesh we apply newly developed methods by hacker and hatemi j 2006 2012 that are based on simulations and are robust to the violation of statistical assumptions especially when the sample size is small as is the case in this article our estimation results reveal that causality nexus of poverty and remittances is bi directional we also find that the causal impact of poverty reduction on remittance is stronger than the reverse impact this finding implies that bangladeshi policy makers can influence remittances through poverty reduction in the long run

do the return intentions of french migrants affect their transfer behaviour abstractthis paper investigates to what extent the return behaviour of migrants affects their transfer decisions both at the extensive and intensive margins we use a unique data set collected on migrants aged 45 70 living in france with detailed information on both return intentions at retirement and on private transfers we find that the temporary nature of migration strongly influences the pattern of transfers made by migrants the probability of remitting for either personal savings or to family members in the origin country increases by more than 10 percentage points with return plans the latter having no effect on gifts to family members living in france at the intensive margin the amount of personal savings sent to the origin country is about twice as high for migrants who intend to return

harnessing the diaspora dual citizenship migrant return remittances political rights provided to immigrants by host countries have received much attention in the literature less attention however has been paid to the extension of extraterritorial rights by home countries in this article i focus on a common type of right provided by home countries to their expatriates the right of dual citizenship dual citizenship rights i argue help home countries leverage the financial and human resources of their diasporas encouraging both remittances and return migration i test this argument using migrant surveys performed in six host countries and find that migrants from homelands that extend dual citizenship are more likely to both remit and express a desire to return home the micro finding regarding remittances is confirmed using aggregate panel data for a large sample of homelands over the period 1980 2009 the results point to the importance of political rights and policies as extended by the migrant s homeland

are the direct and indirect growth effects of remittances significant development economists believe that migrant workers remittances are an important source of funds for long run growth therefore recent studies have investigated the growth effects of remittances and reached different conclusions in many such studies the growth of output is simply regressed on both remittances and the channels through which remittances affect growth thus there is no distinction between the indirect and direct growth effects of remittances and such specifications may give unreliable estimates because of the correlation between the channels and remittances in this paper we make a distinction between the indirect and direct effects of remittances our model is estimated with panel data of 40 high remittance recipient countries and a system gmm panel data estimation method

monetary expansion and real exchange rate dynamics this paper examines the effect of a change in the rate of monetary expansion on the dynamics of the real exchange rate under fully flexible domestic prices and a floating exchange rate the model is similar in structure to an ealier paper by calvo and rodriguez the main difference being that in our model consumers have an infinite planning horizon and long run perfect foresight one of the main findings is that an increase in the rate of monetary expansion has the impact effect of creating a real appreciation of the exchange rate and a deterioration of the balance of payments contrary to the results of calvo and rodriguez

remittances and economic growth a meta analysis abstract expatriate workers remittances represent an important source of financing for low and middle income countries no consensus however has yet emerged regarding the effect of remittances on economic growth in a quantitative survey of 538 estimates reported in 95 studies we find that approximately 40 of the studies report a positive effect 40 report no effect and 20 report a negative effect our results indicate publication bias in favor of positive effects correcting for the bias using recently developed techniques we find that the mean effect of remittances on growth is still positive but economically small nevertheless our results uncover noticeable regional differences remittances are growth enhancing in asia but not in africa studies that do not control for alternative sources of external finance such as foreign aid and foreign direct investment mismeasure the effect of remittances finally time series studies and studies ignoring endogeneity issues report systematically larger effects of remittances on growth

monetary autonomy and exchange rate dynamics under currency substitution abstract this paper uses a two country model to demonstrate that currency substitution is a channel for the international transmission of monetary disturbances under flexible exchange rates in the long run the division of world real wealth and consumption and real exchange rates depend on the growth rates of both monies but inflation of prices denominated in a particular currency depends only on the rate of growth of that money in the short run currency substitution combined with perfect foresight can be responsible for overshooting in the exchange rate in both price levels in real exchange rates and in national levels of real wealth and consumption

risk assessment in energy trading this paper provides a state of the art summary of risk assessment in energy trading techniques from financial engineering are needed by electric energy companies to manage price risk these tools are needed by suppliers distributors and traders in a competitive electric power marketplace tools that have been adapted to the specific environment of the electric power system include portfolio analysis and hedging instruments this paper provides a comprehensive critical literature survey of what has been applied to date in the power markets and which areas continue to need additional research one example market scenario is used throughout the paper to demonstrate the usefulness of the risk assessment methods

do remittances lead to a public moral hazard in developing countries an empirical investigation abstract this article tests the hypothesis that in a context of bad governance remittance inflows strongly reduce public spending on education and health in receiving countries a phenomenon called the public moral hazard problem using a large sample of 86 developing countries over the period 1996 2007 and after factoring in the endogeneity of remittances the results suggest a negative impact of remittances on public spending on education and health when governance is bad in remittance dependent economies

don t tell on me experimental evidence of asymmetric information in transnational households although most theoretical models of household decision making assume perfect information empirical studies suggest that information asymmetries can have large impacts on resource allocation i demonstrate the importance of these asymmetries in transnational households where physical distance between family members can make information barriers especially acute i implement an experiment among migrants in washington dc and their families in el salvador that examines how information asymmetries can have strategic and inadvertent impacts on remittance decisions migrants make an incentivized decision over how much of a cash windfall to remit and recipients decide how they will spend a remittance migrants strategically send home less when their choice is not revealed to recipients recipients make spending choices closer to migrants preferences when the migrants preferences are shared regardless of whether or not the spending choices are revealed to the migrants suggesting that recipients choices are inadvertently affected by imperfect information

financial risk evaluation in stochastic pbuc this letter is an extension of our previous price based unit commitment pbuc work this letter identifies a frontier relationship between payoff and risk this letter also discusses the calculation of target value and risk using payoff risk frontiers test results show a trade off between risk minimization and payoff maximization for power generation utilities

aid policies and growth comment in an extraordinarily influential paper craig burnside and david dollar 2000 p 847 find that aid has a positive impact on growth in developing countries with good fiscal monetary and trade policies but has little effect in the presence of poor policies this finding has enormous policy implications the burnside and dollar 2000 henceforth bd result provides a role and strategy for foreign aid if aid stimulates growth only in countries with good policies this suggests that 1 aid can promote economic growth and 2 it is crucial that foreign aid be distributed selectively to countries that have adopted sound policies international aid agencies public policy makers and the press quickly recognized the importance of the bd findings this paper reassesses the links between aid policy and growth using more data the bd data end in 1993 we reconstruct the bd database from original sources and thus 1 add additional countries and observations to the bd data set because new information has become available since they conducted their analyses and 2 extend the data through 1997 thus using the bd methodology we reexamine whether aid influences growth in the presence of good policies given our focus on retesting bd we do not summarize the vast pre bd literature on aid and growth we just note that there was a long and inconclusive literature that was hampered by limited data availability debates about the mechanisms through which aid would affect growth and disagreements over econometric specification see gustav f papanek 1972 robert cassen 1986 paul mosley et al 1987 peter boone 1994 1996 and henrik hansen and finn tarp s 2000 review since bd found that aid boosts growth in good policy environments there have been a number of other papers reacting to their results including paul collier and jan dehn 2001 carljohan dalgaard and hansen 2001 patrick guillaumont and lisa chauvet 2001 hansen and tarp 2001 robert lensink and howard white 2001 and collier and dollar 2002 these papers conduct useful variations and extensions some of which had already figured in the pre bd literature such as introducing additional control variables using nonlinear specifications etc some of these papers confirm the message that aid only works in a good policy environment while others drive out the aid policy interaction term with other variables this literature has the usual limitations of choosing a specification without clear guidance from theory which often means there are more plausible specifications than there are data points in the sample we differentiate our paper from these others by not deviating from the bd specification thus we do not test the robustness of the results to an unlimited number of variations but instead maintain the bd methodology this paper conducts a very simple robustness check by adding new data that were unavailable to bd thus we expand the sample used over their time period and extend the data from 1993 to 1997 easterly department of economics new york university 269 mercer street new york ny 10003 center for global development and national bureau of economic research e mail william easterly nyu edu levine department of finance carlson school of management university of minnesota 321 19th avenue south minneapolis mn 55455 and national bureau of economic research e mail rlevine csom umn edu roodman center for global development 1776 massachusetts avenue nw washington dc 20036 e mail droodman cgdev org we are grateful to craig burnside for supplying data and assisting in the reconstruction of previous results without holding him responsible in any way for the work in this paper thanks also to francis ng and prarthna dayal for generous assistance with updating the sachs warner openness variable and to three anonymous referees craig burnside and henrik hansen for helpful comments 1 see for instance the world bank 1994 2001 2002 the u k department for international development 2000 president george w bush s speech march 16 2002 the announcement by the white house on creating the millennium challenge corporation white house 2002 as well as a washington post editorial february 9 2002 a financial times column by alan beattie march 11 2002 and the economist march 16 2002

what can new survey data tell us about recent changes in distribution and poverty it has been claimed that in recent times the poor have lost ground both relatively and absolutely even when average levels of living have risen this article tests that claim using household surveys for 67 developing and transitional economies over 1981 94 it finds that changes in inequality and polarization were uncorrelated with changes in average living standards distribution improved as often as it worsened in growing economies and negative growth was often more detrimental to distribution than positive growth overall there was a small decrease in absolute poverty although with diverse experiences across regions and countries almost always poverty fell with growth in average living standards and rose with contraction

international migration and nutritional outcomes in tajikistan abstract tajikistan is the country with the largest share of remittances to gdp in the world at the same time it suffers from stubbornly high levels of child malnutrition against which only very slow progress has been made this paper investigates the relationship between international migration and child malnutrition using data from a recent nationally representative household survey there are theoretical reasons to expect that migration may be exerting both positive and negative effects on nutrition and food security so that understanding what the net effect may be is essentially an empirical question our results indicate that migration appears to be playing a positive role in enhancing child growth patterns as measured by height for age z scores in the country we explore some of the possible channels through which this effect might be operating and find that one such channel is by increasing households kilocalorie consumption

a simple time series test of endogenous vs exogenous growth models an application to the united states this paper presents evidence supporting endogenous growth models that emphasize public structural capital the authors apply a simple test of endogenous vs exogenous growth models in exogenous growth economies temporary innovations to policy variables lead only to temporary changes in gnp levels while in endogenous growth economies the innovations can lead to permanent changes in gnp levels of the seven u s policy variables they examine only non military equipment capital and non military structural capital have a statistically and economically significant effect upon long run gnp levels further estimation suggests that the non military equipment capital result is not robust and that several disaggregate components of structural capital contribute significantly copyright 1996 by mit press

do remittances diminish social violence abstractthis paper represents the first attempt to formalise the relationship between remittances and social violence by developing a model that predicts that migrants remittances lead to the reduction of social violence in the recipient economy under the condition that remittances increase the average product of labour using homicide data as an indicator of social violence we tested our model s prediction controlling for the endogeneity problem with appropriate instruments we found that remittances tend to reduce social violence we performed sensitivity analysis on remittances in the empirical specification and found it robust with an unchanged negative sign

cross country evidence on the link between volatility and growth this paper presents empirical evidence against the standard dichotomy in macroeconomics that separates growth from the volatility of economic fluctuations in a sample of ninety two countries as well as a sample of oecd countries the authors find that countries with higher volatility have lower growth the addition of standard control variables strengthens the negative relationship the authors also find that government spending induced volatility is negatively associated with growth even after controlling for both time and country fixed effects copyright 1995 by american economic association

toward a macroeconomics of the medium run these days macroeconomics has become more respectable than it used to be i can remember when many economists liked to say microeconomics is not problematic but i just don t understand macroeconomics there was a definite implication that something must be wrong with macroeconomics not with the observer of course macroeconomics cannot be exact it has to work by rough analogy and empirical compromise maybe a certain raffishness is inevitable most economists work on microeconomic problems with increasing use of new microeconomic data but now it is widely understood that macroeconomics is at the heart of economics it will not do to be snooty about it this centrality will continue for the best possible reason the need to understand current events especially unfavorable ones and to formulate policies even benign neglect is a policy to

can high inequality developing countries escape absolute poverty do the poor face the same prospects for escaping poverty in high inequality developing countries as in low inequality countries is it possible for inequality to be so great as to stifle prospects of reducing absolute poverty even when other initial conditions and policies are favorable to growth household survey data for developing countries suggest that initial distribution does affect how much the poor share in rising average incomes higher initial inequality tends to reduce growth s impact on absolute poverty by the same token higher inequality diminishes the adverse impact on the poor of general economic contraction combining this evidence with that from recent investigations of inequality s effect on growth the author finds that if inequality is high enough countries that would have very good growth prospects at low levels of inequality may see little or no overall growth and little progress in reducing poverty or even a worsening on both counts the data the author uses suggest that such cases do occur the precision with which key parameters have been estimated makes it difficult to say with confidence how common such cases are but they appear to be in the minority what appear to be the best available estimates suggest that about one fifth of the spells between surveys he analyzed were cases in which poverty was rising yet positive growth in the mean and hence falling poverty is predicted at zero inequality inequality can be high enough to result in rising poverty despite good underlying growth prospects

effect of remittances on poverty and financial development in sub saharan africa summary this paper assesses the effect of the steadily growing remittance flows to sub saharan africa though the region receives only a small portion of the total recorded remittances to developing countries and the volume of aid flows to sub saharan africa swamps remittances this paper finds that remittances which are a stable private transfer have a direct poverty mitigating effect and promote financial development these findings hold even after factoring in the reverse causality between remittances poverty and financial development the paper posits that formalizing such flows can serve as an effective access point for unbanked individuals and households

exchange rate volatility and currency substitution abstract this paper employs a conventional small open economy portfolio balance macromodel to unveil new implications of currency substitution increased substitutability between foreign and domestic currency is found to affect the response of the exchange rate of both asset market and commodity market shocks in particular the extent of exchange rate overshooting and undershooting depends on the degree of currency substitution

remittances and working poverty abstractthis article shows that the level and the predictability of remittances reduce working poverty in receiving economies through their effects on labour market dynamics it takes advantage of the new cross country dataset ilo kilm 7th edition containing information on the share of individuals working for less than us 2 per day to identify the main impacts the article proposes a novel approach to deal with the endogeneity of remittances and migration in addition the results are robust to the possible error in measuring working poverty to the potential attrition bias and to the presence of various control variables