This article analyzes the effect of remittances on aggregate demand and equilibrium income within a Keynesian model. Our analysis demonstrates that the composition of aggregate demand varies because remittances produce an increase in consumption and a contraction in the external sector. The total value of aggregate demand is then reduced by the value of remittances in national currency. Consequently, we confirm that the remittance multiplier is (-1).
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González et al. (2014) studied this question.
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