THE EFFECT OF REMITTANCES ON ECONOMIC GROWTH IN THE EMERGING COUNTRIES OF THE EUROPEAN UNION

With globalization, remittances play a particularly important role in the economies of emerging countries. In this paper we study the impact of remittances on economic growth for emerging countries in the European Union and the evolution of the share of remittances in their gross domestic product. The analysis is performed using two time-dependent regression models (linear and cubic), on data taken from the Eurostat database for the period 2005-2017. The results lead to the conclusion that, in the short term, it is expected that the share of remittances in gross domestic product to maintain the growth trend for most of the analyzed countries (Bulgaria, Czechia, Estonia, Latvia, Romania, Slovakia). The models estimate a downward tendency after 2018 for Poland and Hungary, while short-term decline and growth after 2020, for Lithuania. The regression results obtained are analyzed and interpreted and can be used as a starting point for consequent studies. It is important that remittance flows are primarily used to stimulate the economic growth of these countries by using them for improving health, education and entrepreneurship and less for consumption.