Working Paper Series: Special Edition of 2016 to 2018 Interns

Moreover, there seems to be a clear relationship between remittances and private consumption. Figure 2 shows that the higher the remittances the higher the final domestic private consumption (as a percentage of GDP), which is an indication that remittances inflow to the Latin America and the Caribbean maybe based on altruistic motives.

Figure 2. Remittances scattered against Final Private Consumption.

Additionally, there is a suggested negative relationship between remittances and foreign direct investments. Figure 3 shows that the higher the inflow of remittances, the lower the foreign direct investments (as a percentage of GDP).

Figure 3. FDI (as a percentage of GDP) scattered against Remittances.

129