Surprisingly, Mexico's central bank reckons this trend was bucked in October, when remittances rose sharply.
They were also a powerful cushion in times of conflict or natural disaster, when remittances tended to increase, driven by an empathetic diaspora.
When remittances are viewed as a percentage of GDP, the top recipients in 2011 were Tajikistan (47%), Liberia (31%), Kyrgyz Republic (29%), Lesotho (27%), Moldova (23%), Nepal (22%) and Samoa (21%).
When remittances have convex returns, migrants either save or remit, but do not invest in both assets.
In this figure, when remittances are close to zero, the probability of return migration is zero, so that E[R(r)]=R h (r), and E[w]=E[w h ].19 As remittances increase, the likelihood of return migration becomes strictly positive, and E[R(r)] increases, as it becomes a convex combination of R h (r) and R o (r).
We saw this most recently after the 2008 financial crisis when remittances dipped slightly (6%) for a year and then rebounded in 2010-11.
The author finds that the short run decline in agricultural productivity due to the loss of labour is more than offset by later increases in productivity when remittances are utilised in farm investments [ 29].
To protect this money, top management decided to invest it locally in businesses which would: (1) contribute to the local economy, (2) not require imports from abroad, and (3) if successful, be the kind that could be sold to local investors if and when currency remittances became possible again.
The effects decrease when the remittances are sent by highly educated migrants (Vaaler 2011).
A study about Banco Familiar in Paraguay has shown that users who receive their remittances in checking and savings accounts tend to make only partial withdrawals of this money, instead of collecting the full amount at once, as they tend to do when the remittances are received directly in cash.
