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Volatility Widens Inequality. Could Aid and Remittances Help?

Author

Listed:
  • Lisa CHAUVET

    () (IRD DIAL)

  • Marin FERRY

    (FERDI)

  • Patrick GUILLAUMONT

    () (Ferdi)

  • Sylviane GUILLAUMONT JEANNENEY

    () (Ferdi)

  • Sampawende J.-A. TAPSOBA

    (Fonds monétaire international)

  • Laurent WAGNER

    () (Ferdi)

Abstract

We analyse the relationship between income volatility and inequality and the conditional role played by aid and remittances. Using a panel of 142 countries for the period 1973 to 2012, we find that income volatility has an adverse impact on inequality, and that the poorest people are the most exposed to these fluctuations. However, while aid and remittances do not seem to have a clear direct impact on inequality, we uncover robust evidence which suggests that aid helps to dampen the negative effects of volatility on the distribution of income, while remittances do not.Keywords: Volatility, Inequality, Aid, and Remittances

Suggested Citation

  • Lisa CHAUVET & Marin FERRY & Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY & Sampawende J.-A. TAPSOBA & Laurent WAGNER, 2017. "Volatility Widens Inequality. Could Aid and Remittances Help?," Working Papers P158, FERDI.
  • Handle: RePEc:fdi:wpaper:3082
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    References listed on IDEAS

    as
    1. Ramey, Garey & Ramey, Valerie A, 1995. "Cross-Country Evidence on the Link between Volatility and Growth," American Economic Review, American Economic Association, vol. 85(5), pages 1138-1151, December.
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    Cited by:

    1. Shinhye Chang & Rangan Gupta & Stephen M. Miller & Mark E. Wohar, 2018. "Growth Volatility and Inequality in the U.S.: A Wavelet Analysis," Working papers 2018-05, University of Connecticut, Department of Economics.

    More about this item

    Keywords

    Aid; Income volatility; Inequality; Remittances;

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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