How does financial development influence the impact of remittances on growth volatility?

Ibrahim Ahamada and Dramane Coulibaly

Economic Modelling, 2011, vol. 28, issue 6, 2748-2760

Abstract: This paper empirically examines how financial development influences the impact of remittances on GDP growth volatility. This empirical study is conducted using the panel smooth transition regression (PSTR) approach. The results show that the impact of remittances on GDP growth volatility is nonlinear and changes over time and across countries in function of financial development. More precisely, a high level of financial development helps remittances to have a high stabilizing impact. Therefore, public authorities in remittance recipient countries might implement policies that promote the financial sector in order to allow a high stabilizing impact of remittances.

Keywords: Remittances; Financial development; Growth volatility; PSTR models (search for similar items in EconPapers)
JEL-codes: E32 F22 O16 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (31)

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Working Paper: How does financial development influence the impact of remittances on growth volatility? (2011)
Working Paper: How does financial development influence the impact of remittances on growth volatility? (2011)
Working Paper: How does financial development influence the impact of remittances on growth volatility? (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:28:y:2011:i:6:p:2748-2760

DOI: 10.1016/j.econmod.2011.08.019

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