Do Migrant's Remittance Inflow Affects the Dutch Disease: Evidence from Indonesia

Abstract

Purpose: Remittances have grown in measurement and importance. While such inflows can improve economic growth, they may additionally also reason domestic foreign money to respect and hurt exports – an aspect of impact generally referred to as the Dutch disease. Statistics exhibit that remittances influx to Indonesia grew from 1% of GDP in 1984 to over 9% of GDP in 2020. Theoretically, such a massive influx of overseas foreign money into an economy may lead to Dutch diseases. Methodology: For this purpose, they learn about employing the Autoregressive Distributed Lag Model (ARDL) to observe the impact of migrant remittances on the actual fantastic exchange charge spanning the duration from 1984 to 2020. Findings: In the long run, they find out about finds an effective relationship between migrants’ remittances and the real high-quality change rate, which means that evidence of Dutch Disease risk in Indonesia. This grasp of the Indonesia rupiah relative to different competing countries encourages import and discourages export, leading to the Dutch disease effect. Originality/Value: This study, therefore, investigated whether the large inflow of remittances into the economic system reasons Dutch disease.