tailieunhanh - Relationship between remittance and economic growth in Nepal

For the period between 1976 and 2017, this study investigates the relation from remittances and trade to economic growth. Study applied time series econometric techniques; unit root, cointegration and error correction mechanism to examine long-run and short-run association between dependent and independent variables. Outcome confirms a long-run relationship between remittance, trade and economic growth. However, no short-run causal relationship exists between remittances and economic growth, but trade showed significant influence even in the short run in GDP for the period of analysis. The paper also discusses about the effective utilization of remittances. It is hoped that the study would be helpful to government and policy makers for domestic policy formation in the area of utilization of remittances and management of migration from Nepal. | RELATIONSHIP BETWEEN REMITTANCE AND ECONOMIC GROWTH IN NEPAL Raghu Raj Kaphle ABSTRACT For the period between 1976 and 2017 this study investigates the relation from remittances and trade to economic growth. Study applied time series econometric techniques unit root cointegration and error correction mechanism to examine long-run and short-run association between dependent and independent variables. Outcome confirms a long-run relationship between remittance trade and economic growth. However no short-run causal relationship exists between remittances and economic growth but trade showed significant influence even in the short run in GDP for the period of analysis. The paper also discusses about the effective utilization of remittances. It is hoped that the study would be helpful to government and policy makers for domestic policy formation in the area of utilization of remittances and management of migration from Nepal. Keywords Remittance economic growth migration. INTRODUCTION Among the literature majority of empirical studies dealt with both trade and worker remittances on economic growth Le 2008 Abdulbagi 2016 or the relationship between trade and economic growth Jenish 2013 or the relationship between remittance and economic growth Shera Meyer 2013 Uprety 2017 Giuliano Arranz 2009 . Many studies concluded that remittances and trade promote economic growth however there is a huge debate about the contribution of trade and worker remittance in economic growth. There are many empirical studies concluding that worker remittances have significant and positive relation with growth Azam 2013 Mwangi Mwenda 2015 but many studies are raising the questions on the positive contribution on economic growth development and income promotion Uprety 2016 Detta Sarkar 2014 Pant 2008 . Similarly for the trade openness it is concluded that trade openness has positive implication on economic growth Frankel Romer 1999 Metadeen Metadeen Seetanah 2011 Wacziarg 2001 and some concludes