Remittances for economic development: the investment perspective

Thanh Le

    Research output: Contribution to journalArticlepeer-review

    6 Citations (Scopus)

    Abstract

    Based on the economic theory of the family, this paper constructs a model of remittances where the migrant, besides sending money to his family, also invests in his home country. The investment is looked after by a family member in return for some monetary compensation. The model focuses on two different cases: state-contingent transfers (transfers are tied to investment outcomes) and fixed transfers (transfers are mainly of altruistic motive). As the migrant derives utilities from consumption, his consumption-investment decision is driven by preferences and future investment prospects. The transfers are to increase with both business encouraging and income compensatory effects.

    Original languageEnglish
    Pages (from-to)2409-2415
    Number of pages7
    JournalEconomic Modelling
    Volume28
    Issue number6
    DOIs
    Publication statusPublished - Nov 2011

    Keywords

    • Financial development
    • Income transfer
    • Investment
    • Remittances

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