Microeconomic and Macroeconomic Contexts of Remittances

Abstract

Global remittances flow has been rising considerably over the last decade. Their share in the GDP in some (especially developing) countries reaches several percent. That is why their impact on a migrant's country of origin has become a subject of debate in the scientific community. This chapter provides a synthesis of views that have crystallized as part of an ongoing academic debate on remittance determinants and their impact on recipient countries. The author aims to analyze the fundamental scientific opinions published on this topic and to outline possible directions for future research on migrant remittances. The chapter analyzes individual determinants as well as remittance effects on two levels: microeconomic and macroeconomic ones. The analysis concludes that remittances are an important source of external financing for the economies of developing countries. Nonetheless, they cannot be considered as a panacea for economic backwardness.