| I present three essays on the economics of remittances. In the first essay, I develop the first dynamic stochastic general equilibrium (DSGE) model of endogenous, altruistic remittances and show that it can explain why remittances are countercyclical in some cases and procyclical in others. In the second essay, I empirically examine the relative importance of several factors for determining the cyclicality of remittances, including differences in (i) the persistence of technology shocks, (ii) capital adjustment costs, and (iii) the correlation of technology shocks between the sending and recipient economies. I find that differences in the cyclicality of remittances across countries is driven primarily by differences in technology shock persistence. In the third essay, I explore the use remittances by households in the Philippines and find that remittances are used differently than other sources of income. |
