Working Paper Series: Special Edition of 2016 to 2018 Interns

Due to the differences in results on papers assessed, it was interesting to know which theoretical framework would be more applicable to countries in Latin America and the Caribbean considering each country’s exchange rate regime.

4. Data and Methodology I. Data

This research focussed on 32 of the 33 countries in the Latin America and the Caribbean, which is 97 per cent of the independent nations in that region ( See Appendix, Table 9 ). The panel covers data for these 32 countries spanning the years 2000-2015, implying a large cross section with a small time series. The year 2000 was used as the starting point because since that year, there has been no change in an exchange regime for the countries assessed. Of the 32 countries, 18 use a fixed exchange rate regime and the remaining 14 countries use a floating regime that is a 14:11 fix to float ratio. This allows for a more comprehensive understanding of how exchange rate regimes coupled with remittances may affect per capita GDP and its subsequent impact on growth. The appropriate control variables were chosen based on lessons learnt from similar empirical model used to explain this phenomenon. Fixed and floating exchange rates regimes were accounted for in the models by using dummy variables to capture their effects 32 .

Table 2 give a list and description of the variable used in the models.

32 Regional impacts were also assessed using dummy variables for Latin America and the Caribbean. Results for these were documented but discussed in the paper where relevant.

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