EH.Net Abstracts in Economic History

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Name: David Khoudour-Casteras
Email: david.khoudour at uexternado.edu.co
Institution: Universidad Externado de Colombia

Co-author: Rui Pedro Esteves
University of Oxford
Department of Economics
Manor Road
Oxford OX1 3UQ
United Kingdom

Title: A Fantastic Rain of Gold: European Migrants' Remittances and 
Balance of Payments Adjustment during the Gold Standard Period

Internet Address of abstracted work: not available

By mail:
Universidad Externado de Colombia
Carrera 1 No. 12-66
Bogota
Colombia

Language:

Abstract:
While the mass migration phenomenon that characterized the pre-1914 
world has been widely studied, the related pattern of emigrants' 
remittances during the same period is still largely untouched. This 
paper aims at filling this gap by analyzing the contribution of 
remittances to financial stability during the classical gold 
standard. First, the paper presents a new data set of remittances 
received by five of the European countries with higher emigration 
rates between 1880 and 1914. Second, the paper analyzes the role of 
remittances in the balance of payments adjustment. As underscored by 
the optimum currency area theory, labor mobility constitutes an 
adjustment mechanism for countries under fixed exchange rate regimes. 
In that perspective, emigrants' remittances can help to finance 
external imbalances and buffer financial disturbances. Third, the 
paper tests this claim by showing that higher levels of remittances 
reduced the incidence of sudden stops and current account reversals. 
This effect is stronger for countries under the gold standard, since 
floating countries could rely on exchange rate fluctuations for their 
external adjustment.

Bibliography: Khoudour-Casteras, David. "A Fantastic Rain of Gold: 
European Migrants' Remittances and Balance of Payments Adjustment 
during the Gold Standard Period." Universidad Externado de Colombia 
and University of Oxford, working paper. 2007.

Subject: S
Geographical Area: 0
Country/Region: Europe
Time Period: 7, 8

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