Remittances, financing constraints growth volatility: Do remittances dampen or magnify shocks?

Dramane Coulibaly ()
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Dramane Coulibaly: Centre d'Economie de la Sorbonne - Paris School of Economics, https://centredeconomiesorbonne.cnrs.fr

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: This paper studies empirically the link between remittances and growth volatility by examining the impact of remittances on the propagation of real and monetary shocks. This study is conducted by employing dynamic panel generalized method of moment (GMM) technique for a sample of 63 countries over the 1980-2004 period. The volatility of terms of trade and inflation is used to proxy for real and monetary volatility, respectively. The results show that the impact of remittances on the propagation of shocks depends on the nature of shock. Precisely, the results show that remittances dampen the effect of terms of trade volatility, but, magnify the effect of inflation volatility. The results also suggest that the dampening effect of remittances on propagation of terms of trade volatility is greater in country with high level of financial development

Keywords: Remittances; financing constraints; volatility (search for similar items in EconPapers)
JEL-codes: F22 F24 O11 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2009-03
New Economics Papers: this item is included in nep-fdg and nep-opm
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:09024

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