Do immigrants’ funds affect the exchange rate?

Aziz, Nusrate, Cooray, Arusha, and Teo, Wing Leong (2021) Do immigrants’ funds affect the exchange rate? The World Economy, 44 (2). pp. 560-585.

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DOI: 10.1111/twec.13003

View at Publisher Website: https://doi.org/10.1111/twec.13003

Abstract

Using annual data over 1966–2014 from the Citizenship and Immigration statistics archives of Canada and constructing a time series for the funds brought into Canada by immigrants, we investigate whether these funds affect the exchange rate of Canada. We employ the ARDL bound testing (Pesaran and Shin, Econometrics and economic theory in the 20th century: The Ragnar Frisch centennial symposium. Cambridge, UK: Cambridge UP, 1999), dynamic OLS (Stock and Watson, Econometrica, 1993, 61, 783) approaches to cointegration. 2SLS and GMM methods are also applied to estimate the portfolio balance models of the exchange rate. Estimated results indicate a long-run relation between immigrants’ funds and the exchange rate with immigrants' funds leading to a significant appreciation of the exchange rate in Canada. These results are robust to different estimation methods and an alternative proxy measure for the funds brought into Canada by immigrants.


Item ID:	69172
Item Type:	Article (Research - C1)
ISSN:	1467-9701
Keywords:	Canada, exchange rate, immigrants’ money
Copyright Information:	© 2020 John Wiley & Sons Ltd
Date Deposited:	14 Sep 2021 04:04
FoR Codes:	38 ECONOMICS > 3801 Applied economics > 380112 Macroeconomics (incl. monetary and fiscal theory) @ 100%
SEO Codes:	15 ECONOMIC FRAMEWORK > 1502 Macroeconomics > 150204 Exchange rates @ 50% 15 ECONOMIC FRAMEWORK > 1599 Other economic framework > 159999 Other economic framework not elsewhere classified @ 50%
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