Travail de recherche/Working paper
| Résumé : | Remittances amounts on average two thirds of the FDI inflows of emerging economies. Literature on development and remittances coincides on the fact that when remittances are used as an investment, this investment generally materializes as housing. This work in progress proposes to fill a gap in the literature on remittances and development by studying what is the relation between remittances and housing prices at the aggregate level. This is done by regressing remittances against housing prices and housing approvals taking the Colombian economy as a case of study. The conclusions from the empirical analysis, suggest that remittances seem to increase the relative supply of housing which in turn reduces housing prices. In the long run, this effect seems to fade out as suggested by an estimated model adapted from Blanchard and Quah [1988]. |
