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Remittances and Household Consumption Instability in Developing Countries

  • Christian EBEKE
  • Jean-Louis COMBES

    ()

    (Centre d'Etudes et de Recherches sur le Développement International)

This paper analyzes the impact of remittances on household consumption instability in developing countries on a large panel of developing countries. The four main results are the following: Firstly, remittances significantly reduce household consumption instability. Secondly, the insurance role played by remittances is highlighted: remittances dampen the effect of various sources of consumption instability in developing countries (natural disasters, agricultural shocks, discretionary fiscal policy). Thirdly, the insurance role played by remittances is more important in less financially developed countries. Fourthly, the overall stabilizing effect of remittances is mitigated when remittances over GDP exceed 8.5%.

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Paper provided by CERDI in its series Working Papers with number 201015.

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Length: 33
Date of creation: 2010
Date of revision:
Publication status: Published in World Development, 2011, pages 1076-1089
Handle: RePEc:cdi:wpaper:1165
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