TY - BOOK ID - 11271369 TI - Beware of emigrants bearing gifts : optimal fiscal and monetary policy in the presence of remittances AU - Chami, Ralph. AU - Cosimano, Thomas F. AU - Gapen, Michael. AU - International Monetary Fund. AU - IMF Institute. PY - 2006 SN - 1451863217 1462380085 1451908571 9786613828804 1452714835 1283516357 PB - [Washington, D.C.] : International Monetary Fund, IMF Institute, DB - UniCat KW - Electronic books. -- local. KW - Emigrant remittances -- Econometric models. KW - Fiscal policy -- Econometric models. KW - Monetary policy -- Econometric models. KW - Political Science KW - Law, Politics & Government KW - Immigration & Emigration KW - Emigrant remittances KW - Fiscal policy KW - Monetary policy KW - Econometric models. KW - Tax policy KW - Taxation KW - Immigrant remittances KW - Remittances, Emigrant KW - Government policy KW - Economic policy KW - Finance, Public KW - Foreign exchange KW - Exports and Imports KW - Labor KW - Macroeconomics KW - Financial Markets and the Macroeconomy KW - Comparative or Joint Analysis of Fiscal and Monetary Policy KW - Stabilization KW - Treasury Policy KW - Remittances KW - Demand and Supply of Labor: General KW - Aggregate Factor Income Distribution KW - Macroeconomics: Consumption KW - Saving KW - Wealth KW - Personal Income and Other Nonbusiness Taxes and Subsidies KW - International economics KW - Labour KW - income economics KW - Welfare & benefit systems KW - Labor supply KW - Income KW - Consumption KW - Labor taxes KW - Balance of payments KW - National accounts KW - Taxes KW - International finance KW - Labor market KW - Economics KW - Income tax KW - United States UR - https://www.unicat.be/uniCat?func=search&query=sysid:11271369 AB - This paper uses a stochastic dynamic general equilibrium model to investigate the influence of countercyclical remittances on the conduct of fiscal and monetary policy and trace their effects on real and nominal variables in a business cycle setting. We show that remittances raise disposable income and consumption, and insure against income shocks, thereby raising household welfare. However, remittances increase the correlation between labor and output, thereby producing a more volatile business cycle and increasing output and labor market risk. Optimal monetary policy in the presence of remittances deviates from the Friedman rule, highlighting the need for independent government policy instruments. ER -