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Remittances and Household Consumption Instability in Developing Countries

Abstract : This paper analyzes the impact of remittances on household consumption instability in a large panel of developing countries. There are four main results. First, remittances significantly reduce household consumption instability. Second, remittances play an insurance role by dampening the effects of various sources of consumption instability in developing countries (natural disasters, agricultural shocks, discretionary fiscal policy, systemic financial and banking crises and exchange rate instability). Third, the stabilizing role played by remittances is stronger in less financially developed countries. Fourth, the overall stabilizing effect of remittances is mitigated when remittances exceed 6% of GDP.
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Contributor : Cerdi Etudes & Documents - Publications <>
Submitted on : Friday, June 17, 2011 - 3:11:59 PM
Last modification on : Tuesday, April 20, 2021 - 10:48:06 AM


  • HAL Id : halshs-00601386, version 1



Jean-Louis Combes, Christian Hubert Ebeke. Remittances and Household Consumption Instability in Developing Countries. World Development, Elsevier, 2011, 39 (7), pp.1076-1089. ⟨halshs-00601386⟩



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