WP-01: Economy effects of international remittances: a computable general equilibrium assessment for Vietnam

This research investigates economy wide effects of international remittances on the source countries, where Vietnam is taken as a case study. By using computable general equilibrium (CGE) modeling techniques, we investigate, for the first time, the effects of international remittances on the Vietnamese economy as a whole. Findings from the paper strengthen the view that effects of remittances on developing countries are mixed and complicated. The results show that in the context of Vietnam, where the growing remittance inflows are combined with the economy’s increasing integration into the international markets, all factor prices tend to rise, and industrial sectors are strongly influenced and tend to contract. This implies that the long-run effects of remittances may be negative on the supply side, and may offset their short-run positive effects on the demand side.

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