Remittances and Economic Growth in Mexico: Long Term Implications

This paper examines the impact of remittances on economic growth by looking at time series data from 1960 to 2012 from the country of Mexico. Using the OLS method, these data will be analyzed to see what the long term impact of remittances have been on the growth rate of Mexico. Drawing from the heavily established literature in the field of growth economics, this paper attempts to show the relevance of such theory in the case of the well documented phenomenon of remittances. Mexico is the world’s fourth largest net recipient of remittance inflows and the third largest trading partner of the United States. Although this paper focuses in particular on Mexico’s growth, it could shed light on the relative success of free trade in the North American region as well. The results of this study indicate a weakly positive impact of remittances on economic growth in Mexico