Remittances and Household Consumption Instability in Developing Countries

Jean-Louis Combes and Christian Hubert Ebeke ()

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Abstract: This paper analyzes the impact of remittances on household consumption instability in a large panel of developing countries. There are four main results. First, remittances significantly reduce household consumption instability. Second, remittances play an insurance role by dampening the effects of various sources of consumption instability in developing countries (natural disasters, agricultural shocks, discretionary fiscal policy, systemic financial and banking crises and exchange rate instability). Third, the stabilizing role played by remittances is stronger in less financially developed countries. Fourth, the overall stabilizing effect of remittances is mitigated when remittances exceed 6% of GDP.

Keywords: Remittances; consumption instability; Financial Development; shocks; threshold effects; developing countries (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (126)

Published in World Development, 2011, 39 (7), pp.1076-1089

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Related works:
Journal Article: Remittances and Household Consumption Instability in Developing Countries (2011)
Working Paper: Remittances and Household Consumption Instability in Developing Countries (2011)
Working Paper: Remittances and Household Consumption Instability in Developing Countries (2011)
Working Paper: Remittances and Household Consumption Instability in Developing Countries (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00601386

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