In the U.S. we don't focus much on remittances - many people don't even know what they are. Worker remittances are money payments sent by immigrant individuals (not businesses) back to their home countries. The World Bank also counts as remittances the compensation of employees who are migrant or border workers who live for less than a year in the host country. (*see note at end for World Bank's official definition). In 2009, U.S. inflow remittances (from U.S. residents crossing the border to work in Mexico and Canada) were neglibile (2,947 million). The outflow remittances from the U.S. in 2009 were very small compared to the U.S. GDP (48,304 million) - only about .3% of GDP - but still made the U.S. the top source for remittances in the world. Source: the World Bank 2011 report on remittances cited below and U.S. BEA's published GDP estimates.
For some countries, remittances from the U.S. count for a major portion of their income. Remittances from the U.S. were equal to 17% of El Salvador's GDP in 2008, and almost a quarter of El Salvador's families received remittances from the U.S. (Source: the U.S. Department of State report on El Salvador (http://www.state.gov/r/pa/ei/bgn/2033.htm). The World Bank 2011 report on remittances finds that global remittances are more than two times greater than official aid.
Below highlighted in blue is a summary from the World Bank's Migration and Remittances Factbook 2011: Published November 4, 2010 by World Bank, ISBN: 978-0-8213-8218-9; SKU: 18218. Access with graphs and maps online at
In terms of the simple AD & AS graph, remittances can be viewed as alternative to lending as an extra source to boost C & I. Thus assuming all else equal (including labor effort and nominal exchange rates), an increase in remittances should shift the AD curve right, increasing output and prices.
link to video clip above (2.5 minutes)