Remittances and the Size and Composition of Government Spending
Objective. We study the effect of remittances on the size and composition of public spending. Methodology. An optimization technique is used to develop a dynamic theoretical model and a simulation analysis. Results. It is demonstrated that remittances have a positive income effect on public goods, b...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Instituto Mexicano de Ejecutivos de Finanzas
2023-09-01
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| Series: | Revista Mexicana de Economía y Finanzas Nueva Época REMEF |
| Subjects: | |
| Online Access: | https://www.remef.org.mx/index.php/remef/article/view/745 |
| _version_ | 1827345438392451072 |
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| author | Raul Alberto Ponce Rodriguez Benito Alan Ponce Rodríguez |
| author_facet | Raul Alberto Ponce Rodriguez Benito Alan Ponce Rodríguez |
| author_sort | Raul Alberto Ponce Rodriguez |
| collection | DOAJ |
| description | Objective. We study the effect of remittances on the size and composition of public spending. Methodology. An optimization technique is used to develop a dynamic theoretical model and a simulation analysis. Results. It is demonstrated that remittances have a positive income effect on public goods, but a negative income effect and a price effect on social transfers, which explains why public goods increase, but social transfers can increase or fall due to changes in the remittances. Recommendations. The model makes recommendations for public policy design by characterizing the optimal level of public spending. Limitations. It is desirable to extend our analysis to consider electoral incentives and thus provide different explanations of how remittances might affect public spending. Originality. To the best of our knowledge, this is the first document that develops a theory to explain the effect of remittances on the size and composition of public spending. Conclusions. Remittances have a differentiated effect on public goods and social transfers depending on the income and price effects that affect the composition of public spending. |
| first_indexed | 2024-03-07T23:07:45Z |
| format | Article |
| id | doaj.art-1ba1f85d66014cd696be67750cd39623 |
| institution | Directory Open Access Journal |
| issn | 2448-6795 |
| language | English |
| last_indexed | 2024-03-07T23:07:45Z |
| publishDate | 2023-09-01 |
| publisher | Instituto Mexicano de Ejecutivos de Finanzas |
| record_format | Article |
| series | Revista Mexicana de Economía y Finanzas Nueva Época REMEF |
| spelling | doaj.art-1ba1f85d66014cd696be67750cd396232024-02-21T18:38:19ZengInstituto Mexicano de Ejecutivos de FinanzasRevista Mexicana de Economía y Finanzas Nueva Época REMEF2448-67952023-09-01184e745e74510.21919/remef.v18i4.745541Remittances and the Size and Composition of Government SpendingRaul Alberto Ponce Rodriguez0Benito Alan Ponce Rodríguez1Universidad Autónoma de Ciudad JuárezUniversidad Autónoma de Ciudad JuárezObjective. We study the effect of remittances on the size and composition of public spending. Methodology. An optimization technique is used to develop a dynamic theoretical model and a simulation analysis. Results. It is demonstrated that remittances have a positive income effect on public goods, but a negative income effect and a price effect on social transfers, which explains why public goods increase, but social transfers can increase or fall due to changes in the remittances. Recommendations. The model makes recommendations for public policy design by characterizing the optimal level of public spending. Limitations. It is desirable to extend our analysis to consider electoral incentives and thus provide different explanations of how remittances might affect public spending. Originality. To the best of our knowledge, this is the first document that develops a theory to explain the effect of remittances on the size and composition of public spending. Conclusions. Remittances have a differentiated effect on public goods and social transfers depending on the income and price effects that affect the composition of public spending.https://www.remef.org.mx/index.php/remef/article/view/745remittances, government spending, social security transfers, public goods, taxation |
| spellingShingle | Raul Alberto Ponce Rodriguez Benito Alan Ponce Rodríguez Remittances and the Size and Composition of Government Spending Revista Mexicana de Economía y Finanzas Nueva Época REMEF remittances, government spending, social security transfers, public goods, taxation |
| title | Remittances and the Size and Composition of Government Spending |
| title_full | Remittances and the Size and Composition of Government Spending |
| title_fullStr | Remittances and the Size and Composition of Government Spending |
| title_full_unstemmed | Remittances and the Size and Composition of Government Spending |
| title_short | Remittances and the Size and Composition of Government Spending |
| title_sort | remittances and the size and composition of government spending |
| topic | remittances, government spending, social security transfers, public goods, taxation |
| url | https://www.remef.org.mx/index.php/remef/article/view/745 |
| work_keys_str_mv | AT raulalbertoponcerodriguez remittancesandthesizeandcompositionofgovernmentspending AT benitoalanponcerodriguez remittancesandthesizeandcompositionofgovernmentspending |