Abstract
This paper introduces a remittance-induced credit expansion in a static Keynesian macroeconomic model. A credit expansion in the monetary sector results in lowering the equilibrium level of interest rates, which in turn stimulates interest-sensitive consumption and investment. Secondly, the paper introduces a direct effect of remittances on investment. With the two extensions in a static Keynesian model of remittances, the paper derives the equilibrium level of national income and shows the effects of interactions of remittances with the monetary sector on national income. The results of the paper are illustrated numerically.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
