Remittance flows and US monetary policy

Abstract Remittance inflows are driven by macroeconomic conditions in the home and host economies, respectively. In this paper, we study effect of US monetary policy on remittance flows into economies Latin American Caribbean. The role Fed for remittances has not yet been studied. We estimate a series panel local projections eight countries. A surprise change strong highly significant negative inflows. Our finding remains robust if sample period or include additional variables. Hence, our paper establishes remittance-channel through which affects business cycle abroad.