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The importance of migrant remittances

Many migrant workers systematically send some money back to their home countries to family members who could not follow them or others they know. How important is this source of income for these home countries? Hard to say. But the graph offers three examples, which offer three quick takeaways: 1) remittances can make up a significant share of local GDP, 2) they appear to be growing, and 3) they can be quite variable. We can speculate that this last point may involve adverse consequences, but also that Moldova (for one) is better off with remittances than without.

How this graph was created: Search for “remittances,” pick your countries, and add them to a graph.

Suggested by Christian Zimmermann

View on FRED, series used in this post: DDOI11MDA156NWDB, DDOI11NIA156NWDB, DDOI11PHA156NWDB

On financial stress

The past recession highlighted the financial sector’s role in the economy, specifically that its health can affect economic fluctuations. It is not as easy to see how well this sector is doing now, as there are many, many indicators. (The FRED database is testimony to that.) So it is useful to look for a summary indicator, and three Federal Reserve Banks provide one: The Cleveland, Kansas City, and St. Louis Feds each offer their own financial index to measure the stress or uncertainty within the financial sector. Each draws on different data, uses different methodologies, and emphases different factors. Of course, the indexes can incorporate only tangible information to measure something more or less intangible, so they are going to be imperfect. Still, as the graph shows, they correlate remarkably well.

How this graph was created: Search for “financial stress index” and select the three series. Click “add to graph.”

Suggested by Christian Zimmermann

View on FRED, series used in this post: CFSI, KCFSI, STLFSI


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