In this paper, I analyze the business cycle properties of remittances and output series for three pairs of countries: the United States–Mexico, the United States–El Salvador, and Germany–Turkey. Using an unobserved components state-space model (via the BeveridgeNelson decomposition), I decompose the remittances and output series into stochastic permanent and cyclical components. I then use the resulting stationary cyclical components to estimate co-movements between remittances and output series. Empirical results indicate that remittances are counter-cyclical with all the home countries: Mexico, El Salvador, and Turkey. With respect to source countries, remittances to Mexico are counter-cyclical with the United States business cycle, while remittances from the United States to El Salvador and remittances from Germany to Turkey are strongly pro-cyclical with output fluctuations in the source country. The contribution of this paper to the literature is twofold: (1) I use highfrequency data (quarterly) for a relatively long period of time; and (2) I employ more recent and sophisticated econometric techniques in the decomposition of the series into stochastic permanent and cyclical components. The existing literature lacks both of these important aspects of my analysis. I show that once both of these factors are incorporated into the analysis, empirical results are more aligned to those predicted by economic theory. JEL codes: E32, F24, C22 * Roberto A. Coronado, El Paso Branch, Federal Reserve Bank of Dallas, 301 East Main Street, El Paso, TX, 79901. email@example.com. 915-521-5235. The author is grateful to Chris Murray, Dietrich Vollrath, and David Papell for advice and encouragement. The views expressed in this paper are those of the author and do not necessarily reflect the views of the Federal Reserve Bank of Dallas or the Federal Reserve System..