CEPII, Recherche et Expertise sur l'economie mondiale
Global Spillovers of US Monetary Policy: New Insights from the Remittance Channel


Pablo Aguilar-Perez

 Points clés :
  • We show that US monetary tightening generates global spillovers through the remittance channel, with outflows falling in source countries and amplifying the global financial cycle.
  • We uncover an inverse U-shaped relationship between remittance dependence and output responses: moderate inflows buffer shocks, while high dependence (above 4% of GDP) magnifies recessionary effects.
  • W e document strong heterogeneity driven by migrant skill composition: low-skilled diasporas generate pro-cyclical remittances and higher vulnerability, whereas skilled or diversified diasporas stabilize remittance flows.

 Résumé :
This paper examines the global spillovers of US monetary policy through the remittance channel, in both sending and recipient countries. Using a dataset covering 8 remittance-sending and 41 recipient countries from January 1997 to December 2017, we apply a local projections framework to trace the dynamic effects of unexpected US monetary tightening. We find that remittance outflows decline in advanced economies following policy shocks, illustrating the pro-cyclicality of remittances in source countries and their role in amplifying global financial spillovers. Among recipient countries, our results show that in countries with low to moderate remittance dependence, inflows tend to increase following a contractionary shock – consistent with altruistic or insurance-driven motives. In contrast, remittances decline in highly dependent countries, aligning with self-interest or investment-driven behavior. We find that these heterogeneous responses are shaped by migrant profiles: countries with high remittance dependence typically have a larger share of low-skilled migrants and display more strongly pro-cyclical remittance patterns. In contrast, less dependent countries tend to have more skilled or diversified diasporas, resulting in more stable and less cyclical remittance flows.


 Mots-clés : Global Spillovers | Remittances | US Monetary Policy | Emerging Markets

 JEL : F24, E52, F41, F44
CEPII Working Paper
N°2025-21, December 2025

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