Bayesian Networks for Migration, International Remittances, Trade, Foreign Direct Investments, Inflation, Real Interest Rate and Employment in Georgia

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Migration has long been a topic of interest in Georgia, given its small economy, population, and unique history and culture. The main objective of this study is to examine the factors affecting emigration and immigration in Georgia and identify the dependencies among various macroeconomic variables, such as international remittances, trade, foreign direct investment (FDI), inflation, real interest rates, and employment. Using data spanning from 2002 to 2023, the study applies a machine learning technique, specifically Bayesian Networks, to analyze these relationships. The findings are discussed, and conclusions are drawn, along with recommendations for both the government and researchers for further exploration. To our knowledge, this is the first study to apply the Bayesian Network algorithm to investigate these dynamics in Georgia, filling an important research gap. The results indicate that both immigration and emigration are affected by remittances paid, with emigration also being dependent on employment. It was found that remittances received and exports are directly influenced by remittances paid, while imports are affected by both exports and employment. Additionally, remittances received are directly dependent on imports, and the real interest rate is influenced by both imports and inflation (CPI). FDI is shown to be dependent on inflation, imports, and remittances received. Furthermore, both emigration and immigration are dependent on exports, imports, and remittances received, with immigration also exhibiting a dependency on FDI.