The Path of Remittances to Consumption or Saving! Albania Case Study
The Path of Remittances to Consumption or Saving! Albania Case Study

Author(s): Nevila Mehmetaj
Subject(s): Economy, Migration Studies
Published by: Transnational Press London
Keywords: Remittances; Albania; emigration; economy; mechanism; development;
Summary/Abstract: Since the change of the political systems in the 1990-s in Albania, massive emigration has been a continuous phenomenon of different scales in Albania. The outflow migration phenomenon is associated with inflow of financial resources to the origin families. Remittances have been a vital financial source of living for a considerable number of households. Therefore they constitute an important financial mechanism for the funding of the country's economy. Empirical studies perform in the field suggest contradictory results as remittances do not have uniform macroeconomic effects from country to country or across time. Empirical regression analysis on emerging economies, with long-period data, suggest both that there is a positive impact of remittances on country economic growth; while others confirm a negative relation effect of remittances on the country’s economic development. The analysis further reveal that remittances diminish macroeconomic volatility through smoothing aggregate consumption.Based on this, naturally, it is raised the question: is any impact of remittances in the macroeconomic gears of Albania country? Therefore it is the purpose of this paper to analyze the effect of the Albanian emigrant’ remittances on the country-specific macroeconomic variables such as aggregate consumption, national saving (by real variables, in % of GDP), and economic growth rate.

• Details
• Contents