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Rainfall, Financial Development, and Remittances: Evidence from Sub-Saharan Africa

Author

Listed:
  • Rabah Arezki

    (International Monetary Fund (IMF))

  • Markus Bruckner

    (School of Economics, University of Adelaide)

Abstract

We use annual variations in rainfall to examine the effects that exogenous, transitory income shocks have on remittances in a panel of 41 Sub-Saharan African countries during the period 1970-2007. Our main finding is that on average rainfall shocks have an insignificant contemporaneous effect on remittances. However, the marginal effect is significantly decreasing in the share of domestic credit to GDP. So much so, that at high levels of credit to GDP rainfall shocks have a significant negative effect on remittances, while at low levels of credit to GDP the effect of rainfall on remittances is significantly positive.

Suggested Citation

  • Rabah Arezki & Markus Bruckner, 2011. "Rainfall, Financial Development, and Remittances: Evidence from Sub-Saharan Africa," School of Economics and Public Policy Working Papers 2011-30, University of Adelaide, School of Economics and Public Policy.
    • Handle: RePEc:adl:wpaper:2011-30
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    File URL: https://media.adelaide.edu.au/economics/papers/doc/wp2011-30.pdf
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • F30 - International Economics - - International Finance - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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