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Do remittances dampen the effect of natural disasters on output growth volatility in developing countries?

Listed author(s):
  • Christian Ebeke
  • Jean-Louis Combes

This article examines whether or not remittance inflows help mitigate the effects of natural disasters on the volatility of the real output per capita growth rate. Using a large sample of developing countries and mobilizing a dynamic panel data framework, it uncovers a diminishing macroeconomic destabilizing consequence of natural disasters as remittance inflows rise. It appears that the effect of natural disasters disappears for a remittance ratio above 8% of the Gross Domestic Product (GDP). However, remittances aggravate the destabilizing effects of natural disasters when they exceed 17% of the GDP. Finally, the article shows that current and lagged remittance inflows significantly reduce the number of people killed by natural disasters and the number of people affected, respectively.

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File URL: http://hdl.handle.net/10.1080/00036846.2012.659347
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Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 45 (2013)
Issue (Month): 16 (June)
Pages: 2241-2254

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Handle: RePEc:taf:applec:45:y:2013:i:16:p:2241-2254
DOI: 10.1080/00036846.2012.659347
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  1. Jesus Crespo Cuaresma, 2010. "Natural Disasters and Human Capital Accumulation," World Bank Economic Review, World Bank Group, vol. 24(2), pages 280-302, July.
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