Transformations  in
Business & Economics

Remittances and Economic Growth
Cristian Incaltarau, Liviu-George Maha

ABSTRACT. The main objective of this paper is to analyse the interrelationship between remittances and economic growth dynamics. In order to achieve this objective, a comprehensive study of literature has been induced to identify the impact of remittances on origin country economy and to determine possible channels through which they can contribute to economic growth. The third objective is to analyse the Romanian case study regarding flow of remittances evolution and their impact on the Romanian economy. The main conclusion is that remittances’ contribution to economic growth depends on how they are used in the country of origin. Remittances can foster growth when are directed to investment or education or through the multiply effect mechanism driven by increased demand due to additional income created by the money received from abroad. Analysing the case of Romania we could not identify a significant contribution of remittances to stimulate the growth of the Romanian economy.

KEYWORDS: remittances, migration, economic growth, investment, Romania.

JEL classification: F24, O47, O52.