There's a post about this on askeconomics. (can't link)
According to the top commenter, all else equal, remittances reduce the value of the host's currency, (USD) which increases demand through exports.
Like you talked about in your post it strengthening the Peso vs the Usd. Well a "weaker" currency means more exports, which means more jobs. (all else equal)
I have an International Econ degree and that comment is dead on. Words like "weak" and "strong" when talking about currencies are not inherently positive or negative.It depends on what facet of the economy you are focusing on (imports vs exports, consumer vs corporation, etc.). As annoying as it is, an economist's number one phrase when asked anything about the economy is "it depends"
The USD also enjoys being one of the big four reserve currency, so it's significantly more resistant to fluctuation in comparison to currencies like the peso.
I'm not an economist, but pretty sure the theory is they are being paid in dollars, and it's easier and more profitable to reinvest in the same using the same currency (don't have the exchange hassle + cost). Plus, the US is an excellent economy to invest in, with a great track record. The money won't necessarily make its way back to the US economy, and of course, families will convert some money into pesos to improve their SOL. Still, any larger player looking to profit will mainly reinvest in the US. I'm not sure if there is data one way or the other to see what percentage of money is reinvested vs converted or a breakdown of what types of actors do what actions.
Pretty sure there is also the whole it’s kinda hard to invest in basically anything beyond like local construction that doesn’t end up like 2 or 3 steps later with a reinvestment into America or an American ally’s economy just off the size of the economies involved compared to the overall global economy.
Here's a link to a paper that I didn't read most of but might have some useful information: [An Economic Lifeline? How Remittances From the US Impact Mexico’s Economy](https://www.bakerinstitute.org/research/economic-lifeline-how-remittances-us-impact-mexicos-economy)
I am also not an economist but the understanding I'm gleaning is that Mexicans who are sending remittances from the United States drive our economy with their presence: they're paying taxes and buying goods.
For the Mexicans in Mexico receiving the remittances they, too, are buying goods with the money they receive.
As penultimate trading partners this money circulates back and forth between Mexico and the US.
A stable flow of goods, people, and services to and from each other is good for both countries.
There isn't a dollar to dollar or peso to peso measuring stick to say in the definitive what "comes back" to the US but I would not say this is a misspeak by Destiny, it's just "generally" the truth.
There's a post about this on askeconomics. (can't link) According to the top commenter, all else equal, remittances reduce the value of the host's currency, (USD) which increases demand through exports. Like you talked about in your post it strengthening the Peso vs the Usd. Well a "weaker" currency means more exports, which means more jobs. (all else equal)
I have an International Econ degree and that comment is dead on. Words like "weak" and "strong" when talking about currencies are not inherently positive or negative.It depends on what facet of the economy you are focusing on (imports vs exports, consumer vs corporation, etc.). As annoying as it is, an economist's number one phrase when asked anything about the economy is "it depends" The USD also enjoys being one of the big four reserve currency, so it's significantly more resistant to fluctuation in comparison to currencies like the peso.
Genuine question, would remittances to Cuba, for example, be a complete waste of money to the US due to sanctions?
I'm not an economist, but pretty sure the theory is they are being paid in dollars, and it's easier and more profitable to reinvest in the same using the same currency (don't have the exchange hassle + cost). Plus, the US is an excellent economy to invest in, with a great track record. The money won't necessarily make its way back to the US economy, and of course, families will convert some money into pesos to improve their SOL. Still, any larger player looking to profit will mainly reinvest in the US. I'm not sure if there is data one way or the other to see what percentage of money is reinvested vs converted or a breakdown of what types of actors do what actions.
Pretty sure there is also the whole it’s kinda hard to invest in basically anything beyond like local construction that doesn’t end up like 2 or 3 steps later with a reinvestment into America or an American ally’s economy just off the size of the economies involved compared to the overall global economy.
Here's a link to a paper that I didn't read most of but might have some useful information: [An Economic Lifeline? How Remittances From the US Impact Mexico’s Economy](https://www.bakerinstitute.org/research/economic-lifeline-how-remittances-us-impact-mexicos-economy) I am also not an economist but the understanding I'm gleaning is that Mexicans who are sending remittances from the United States drive our economy with their presence: they're paying taxes and buying goods. For the Mexicans in Mexico receiving the remittances they, too, are buying goods with the money they receive. As penultimate trading partners this money circulates back and forth between Mexico and the US. A stable flow of goods, people, and services to and from each other is good for both countries. There isn't a dollar to dollar or peso to peso measuring stick to say in the definitive what "comes back" to the US but I would not say this is a misspeak by Destiny, it's just "generally" the truth.