LES TRANSFERTS DE FONDS DES MIGRANTS INFLUENCENT-ILS LE TAUX DE CHANGE REEL A MADAGASCAR

Abstract

Emigrants ‘remittances is currently a significant source of foreign currency. This paper aims to study the impact of remittances on the real exchange rate for the case of Madagascar for the periods 1980 to 2022. The study uses a vector error correction model (VECM) and Johansen cointegration technique to estimate the short-run and the long-run relationship between workers’ remittance and the real exchange rate. This study finds a statistically significant long-run relationship between workers’ remittance and the real exchange rate. We found that an increase in worker’s remittances of 1% point of GDP is associated with an appreciation of Madagascar’s real effective exchange rate by 0.036%. This result approves the hypothesis of Dutch disease of the Malagasy economy. However, in short-run, all exogenous variables are not statistically significant.