The impact of remittances on consumption and investment in Romania

• Main Authors: Cristian ÎNCALŢĂRĂU, Liviu-George MAHA
• Format: Article
• Language: English
• Published: Alexandru Ioan Cuza University of Iasi 2012-12-01
• Series: Eastern Journal of European Studies
• Subjects: labour migration; remittances; household consumption; investment; Romania
• Online Access: http://ejes.uaic.ro/articles/EJES2012_0302_INC.pdf

This article proposes an econometric analysis of the effects of remittances on the Romanian economy in terms of consumption and investment. Unlike the other sociological studies regarding the Romanian migration phenomenon, the present research targets the macroeconomic level, following the extent to which remittances have supported the evolution of consumption and investment.Contrary to our assumptions, the results showed that remittances had a more significant contribution to investment than to consumption. This may be due to the data we have used, which include only the amounts sent through formal channels which are indeed bigger and meant for investment purposes.