Are Foreign Aid and Remittance Inflows a Hedge Against Food Price Shocks?
AbstractThis paper explores the role of foreign aid and remittance inflows in the mitigation of the effects of food price shocks. Using a large sample of developing countries and mobilising dynamic panel data specifications, the econometric results yield two important findings. First, remittance and aid inflows significantly dampen the effect of food price shocks in the most vulnerable countries. Second, 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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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 12/67.
Date of creation: 01 Mar 2012
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This paper has been announced in the following NEP Reports:
- NEP-AGR-2012-03-21 (Agricultural Economics)
- NEP-ALL-2012-03-21 (All new papers)
- NEP-MIG-2012-03-21 (Economics of Human Migration)
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