Essay on The Impact of the Remittances in Latin America

Introduction In Latin America migration and remittances have become structural features in the economy, the society, and in the political environment; due to the underdevelopment and inequality of the region. Because they relative importance, trends in migration and the impact of remittances in population of Latin America are the main topics that we will analyze in this research focusing on reduction of poverty and inequality. This research will aim to answer the next: Do remittances finance development in the region? Do they contribute to reduce poverty? Do they increase the inequality or help to reduce it? Do remittances are used only for consumption or they promote investment in a positive way? In order to reach the objective†¦show more content†¦Finally, we will present some general conclusions. Literature Overview The framework related to the impact of remittances can be classified in macroeconomic and microeconomic according to several recent researches. Even though there is a general consensus that remittances are positive for the economic development, some authors claim they might have negative effects (Barajas et al., 2009; Bettin and Zazzaro, 2008; Chami, Fullenkamp and Jahjahha, 2005). When talking about their impact, some countries in which the remittances constitute a huge source of the national income we can appreciate the macroeconomic effects of the remittances in the economic growth. Some aggregate analyses of the relationship between remittances and economic growth have found a positive correlation between these two variables (Faini, 2007; World Bank, 2006a; Fullenkamp, Gapen, and Montiel, 2009). Some other studies have proven that the remittances affect the economic growth in the sense that there are foreign savings, and they interact with the structure of the local economy if their use is productive (Fullenkamp, Gapen, and Montiel, 2009). It has been demonstrated that remittances respond to macroeconomic fluctuations, in particular to the inflation, showing countercyclical trends, due toShow MoreRelatedThe Country Of Nicaragua And The Center Of Central America1063 Words   |  5 PagesThe country of Nicaragua, located in the center of Central America, is one the poorest nations in Latin America. Nicaragua’s citizens are primarily mestizo who account for almost 70% of the population. With a population of nearly six million, 58.8% of Nicaraguans live in urban areas, with nearly 2% of citizens migrating from rural areas to the cities in search of jobs and better welfare. However, internal migration to rural areas also exist seasonally for agricultural labor. Due to the current economicRead MoreThe Global Financial Crisis Of The Usa1383 Words   |  6 PagesBrazil and South Africa to the countries of South Asia and Latin America. 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