The Analysis of Romania’s External Migration and of the Causality between Remittances and Romania’s Economic Growth
Author:Viorica Chirila and Ciprian Chirila
JEL:F22, F24, C30
DOI:
Keywords:remittances, international migration, emigration of labour force, investments,
gross domestic product, Granger causality, Romania.
Abstract:
The Central and East European countries are affected after the fall of the communism, by
the international migration for work towards the developed countries. The adherence to the
European Union and the lift of restrictions on the labour market in Western Europe
facilitated the short-term and definitive emigration. The temporary and definitive departure
of a part of the labour force from the emigration countries led to a significant flow of
remittances. Being viewed as the main gain of the loss of labour force, remittances are
important at macroeconomic level to the extent in which they bring in the receiving country
economic growth. The emigration of the labour force may have a positive or a negative
influence on the economy of a country according to the way in which remittances received
are used by emigrants. This study analyses the impact that the remittances have on the
economic development of the country, on investments and exports in Romania. The
characteristics of macroeconomic variables used require, for the econometric analysis, the
determination of the Granger causality by means of the Toda and Yamamoto’s procedure
(1995). The results obtained confirm that remittances do not Granger cause either the
economic development of Romania expressed in the GDP, or the investments or the
exports.