Are Foreign Aid and Remittances a Hedge against Food Price Shocks in Developing Countries?
AbstractThis paper measures the effects of food price shocks on both the level of household consumption per capita and the instability of the household consumption per capita growth rate in developing countries. In this vein, the paper explores the role of aid and remittance inflows in the mitigation of the effects of food price shocks in the recipient economies. Using a large sample of developing countries observed over the period 1980-2009 and mobilising dynamic panel data specifications, the econometric results yield three important findings. First, food price shocks significantly affect both the level and the instability of household consumption in highly vulnerable countries. Second, remittance and aid inflows significantly dampen the effect of food price shocks in the most vulnerable countries. Third, a lower remittance-to-GDP ratio is required in order to fully absorb the effects of food price shocks compared to the corresponding aid-to-GDP ratio.
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Date of creation: 04 Jan 2012
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Household consumption; food price shocks; vulnerability; Aid; Remittances;
Other versions of this item:
- Christian EBEKE & Jean-Louis COMBES & Mireille NTSAMA ETOUNDI & Thierry YOGO, 2011. "Are Foreign Aid and Remittances a Hedge against Food Price Shocks in Developing Countries?," Working Papers 201121, CERDI.
- NEP-AGR-2011-07-27 (Agricultural Economics)
- NEP-ALL-2011-07-27 (All new papers)
- NEP-DEV-2011-07-27 (Development)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Aid and remittances as hedges against food price shocks
by Economic Logician in Economic Logic on 2011-08-03 14:21:00
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