Table of Contents
Economics Research International
Volume 2014, Article ID 965240, 8 pages
http://dx.doi.org/10.1155/2014/965240
Research Article

The Remittances-Output Nexus: Empirical Evidence from Egypt

1Department of Economics, Concordia University, Hall Building, 1455 de Maisonneuve Boulevard West, Montreal, QC, Canada H3G 1M8
2Department of Economics, Faculty of Commerce, Damanhour University, Damanhour, Egypt

Received 21 February 2014; Revised 1 May 2014; Accepted 2 May 2014; Published 22 May 2014

Academic Editor: Thanasis Stengos

Copyright © 2014 Mesbah Fathy Sharaf. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This paper examines the long-run causal link between remittances and output in Egypt for the period 1977–2012. The long-run causal link is examined using the autoregressive distributed lag (ARDL) bounds test for cointegration, along with a vector error-correction model to estimate the short- and long-run parameters of equilibrium dynamics. Results show that remittances and GDP are cointegrated, with a statistically significant, positive causality running from remittances to output, while output is found not to be a long-run forcing factor of remittances in Egypt. The findings of this paper shed light on the importance of remittances for promoting economic growth in Egypt. Governmental policies that attract more remittance inflows, along with their efficient use, could promote economic growth in Egypt.