IESET.
Hypotheses·monetary·latam_remittance_dependency_2020_2025_dollarisation_pull

Across six Latin American economies with high US-source remittance dependency (MEX, GTM, HND, SLV, NIC, DOM), the post-COVID expansion of US-to-LatAm remittance flows (2020-2024) combined with the 2022-2023 Federal-Reserve hiking cycle produced measurable dollarisation pressure: rising USD share of resident deposits, rising USD-denominated household savings, and (where measurable) rising USD-denominated retail circulation.

The pre-registered claim is that across these six countries, the growth in remittances-as-share-of-GDP between 2019 and 2024 is positively associated with the change in resident-deposit USD share over the same window (cross-country regression coefficient > 0.15 with p < 0.10), AND that the US-Fed-rate-hike pass-through to local deposit rates is incomplete in non-dollarised economies (real-rate gap widened > 100 bp at peak), creating an additional dollarisation incentive.

PARTIALengine/runs/latam_remittance_dependency_2020_2025_dollarisation_pull

PARTIAL — coef=-0.03184, p=0.561 (above α=0.1); direction inconclusive

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

In plain terms, this asks whether remittance share of income change is actually linked to better or worse resident deposit usd share from 2017 to 2025.

plain answer

The evidence is suggestive but not decisive. coef=-0.03184, p=0.561 (above α=0.1); direction inconclusive

why it matters

This matters because monetary claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 6 country or place units from 2017 to 2025, using a panel fe design, with fixed effects for country and year.

what was measured
What changed
  • Remittance share of income change
  • Us fed rate pass through gap
What we checked
  • Resident deposit usd share
  • Real local currency deposit rate
  • Real effective exchange rate
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/latam_remittance_dependency_2020_2025_dollarisation_pull
1007550250201720212025MEXGTMHNDSLVNICDOM
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show resident_deposit_usd_share across 6 sampled countries over 2017–2025.
The shapes above are stylised — none of the lines are real data.
Placeholder for latam_remittance_dependency_2020_2025_dollarisation_pull. Published chart will be generated from engine/runs/latam_remittance_dependency_2020_2025_dollarisation_pull/chart_data.json.

Pre-registration

pre-registered
first-spec commit 098ce96 · 2026-04-30T12:57:33Z
run generated · 2026-06-29T17:54:21Z

Across six Latin American economies with high US-source remittance dependency (MEX, GTM, HND, SLV, NIC, DOM), the post-COVID expansion of US-to-LatAm remittance flows (2020-2024) combined with the 2022-2023 Federal-Reserve hiking cycle produced measurable dollarisation pressure: rising USD share of resident deposits, rising USD-denominated household savings, and (where measurable) rising USD-denominated retail circulation. The pre-registered claim is that across these six countries, the growth in remittances-as-share-of-GDP between 2019 and 2024 is positively associated with the change in resident-deposit USD share over the same window (cross-country regression coefficient > 0.15 with p < 0.10), AND that the US-Fed-rate-hike pass-through to local deposit rates is incomplete in non-dollarised economies (real-rate gap widened > 100 bp at peak), creating an additional dollarisation incentive.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Refuted if panel-FE coefficient on remittance-share-change is less than 0.15 with p > 0.10 (i.e., dollarisation pressure does NOT track remittance dependency cross-sectionally), OR if the cross-section regression's coefficient is negative or insignificant. Mixed if panel coefficient is positive but small (0.05-0.15). Supported if panel coefficient > 0.15 at p < 0.10 AND cross-section regression points the same way.

formal test & threshold
test:      panel_fe_remittance_dollarisation_pressure
threshold: panel_FE_coefficient_remittance_share >= 0.15 at p < 0.10 AND cross_section_coefficient > 0

Method

Template
panel_fe
Fixed effects
country, year
Clustering
country
Sample
6 countries · 2017 – 2025
Evidence type
associational

Primary: country-year panel fixed-effects regression of change in resident-deposit USD share on change in remittance-share-of-GDP, with country and year fixed effects, clustered SE at country level. Secondary: cross-section regression of 2024-vs-2019 change in USD-deposit share on 2024-vs-2019 change in remittance share, single observation per country (5 non-dollarised countries). Tertiary: time-series correlation of monthly remittance-flow series with monthly USD-deposit-share for the country with cleanest data (DOM or HND).

Data

VariableSourceTransform
resident_deposit_usd_share
outcome
imf:DCFD_USD_DCtier 2
world_bank_wdi:FB.AST.NPER.ZStier 2
pct_total_deposits
real_local_currency_deposit_rate
outcome
imf:FIDRtier 2
world_bank_wdi:FR.INR.DPSTtier 2
real_rate_yoy
real_effective_exchange_rate
outcome
bis:WS_EERtier 2
index_level_monthly
remittance_share_of_gdp_change
treatment
world_bank_wdi:BX.TRF.PWKR.DT.GD.ZStier 2
change_2019_to_2024
us_fed_rate_pass_through_gap
treatment
derived: (us_policy_rate - local_deposit_rate) - (us_2017_avg - local_2017_avg)change_in_rate_gap
cpi_inflation
control
imf:PCPIPCHtier 2
yoy_pct
pre_treatment_dollarisation_level
control
imf:DCFD_USD_DCtier 2
pre_2020_avg
oil_price
control
fred:DCOILBRENTEUtier 1
imf_pcps:POILBREtier 1
log_level
us_recession_indicator
control
fred:USRECtier 1
binary

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — latam_remittance_dependency_2020_2025_dollarisation_pull

Verdict: PARTIAL — coef=-0.03184, p=0.561 (above α=0.1); direction inconclusive

Pre-registration

  • Claim: Across six Latin American economies with high US-source remittance dependency (MEX, GTM, HND, SLV, NIC, DOM), the post-COVID expansion of US-to-LatAm remittance flows (2020-2024) combined with the 2022-2023 Federal-Reserve hiking cycle produced measurable dollarisation pressure: rising USD share of resident deposits, rising USD-denominated household savings, and (where measurable) rising USD-denominated retail circulation. The pre-registered claim is that across these six countries, the growth in remittances-as-share-of-GDP between 2019 and 2024 is positively associated with the change in resident-deposit USD share over the same window (cross-country regression coefficient > 0.15 with p < 0.10), AND that the US-Fed-rate-hike pass-through to local deposit rates is incomplete in non-dollarised economies (real-rate gap widened > 100 bp at peak), creating an additional dollarisation incentive.
  • Falsification rule: Refuted if panel-FE coefficient on remittance-share-change is less than 0.15 with p > 0.10 (i.e., dollarisation pressure does NOT track remittance dependency cross-sectionally), OR if the cross-section regression's coefficient is negative or insignificant. Mixed if panel coefficient is positive but small (0.05-0.15). Supported if panel coefficient > 0.15 at p < 0.10 AND cross-section regression points the same way.
  • Falsification test: panel_fe_remittance_dollarisation_pressure

Estimate

  • Method: linearmodels.PanelOLS
  • Coefficient (treatment): -0.03184
  • Std error: 0.05406
  • p-value: 0.561
  • Observations: 41, countries: 6
  • Within R²: -0.157
  • Fixed effects: entity=True, time=True
  • Clustering: country

Variables resolved

  • imf:DCFD_USD_DC; world_bank_wdi:FB.AST.NPER.ZS → resident_deposit_usd_share (outcome, publisher=world_bank_wdi, n=2105)
  • imf:FIDR; world_bank_wdi:FR.INR.DPST → real_local_currency_deposit_rate (outcome, publisher=world_bank_wdi, n=4896)
  • bis:WS_EER → real_effective_exchange_rate (outcome, publisher=bis, n=2112)
  • world_bank_wdi:BX.TRF.PWKR.DT.GD.ZS → remittance_share_of_gdp_change (treatment, publisher=world_bank_wdi, n=8867)
  • imf:PCPIPCH → cpi_inflation (controls, publisher=imf, n=10789)
  • fred:DCOILBRENTEU; imf_pcps:POILBRE → oil_price (controls, publisher=fred, n=240)
  • fred:USREC → us_recession_indicator (controls, publisher=fred, n=762)

Variables missing data

  • derived: (us_policy_rate - local_deposit_rate) - (us_2017_avg - local_2017_avg) (treatment, name=us_fed_rate_pass_through_gap) — vintage not on disk
  • imf:DCFD_USD_DC (controls, name=pre_treatment_dollarisation_level) — vintage not on disk

Generated by scripts/run_panel_fe.py at 2026-06-29T17:54:21+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

Six-country cross-section + time-series panel design. SLV is dollarised (2001) so serves as the dollarisation-saturated control; the other five vary in dollarisation pressure. Remittance- share-of-GDP is the largest cross-country variation: SLV/HND/GTM at 20-30%, DOM at ~9%, MEX at ~4%, NIC at 27%. Post-COVID remittance expansion was disproportionate (Mexican remittances grew from $36bn in 2019 to $63bn in 2023 — 75% increase). The hypothesis tests whether this flow expansion mechanically raised dollarisation pressure in the recipient economies.

Authored framework. Read the transparency note.