Are Foreign Aid and Remittance Inflows a Hedge Against Food Price Shocks?
This paper explores the role of foreign aid and remittance inflows in the mitigation of the effects of food price shocks. Using a large sample of developing countries and mobilising dynamic panel data specifications, the econometric results yield two important findings. First, remittance and aid inflows significantly dampen the effect of food price shocks in the most vulnerable countries. Second, a lower remittance-to-GDP ratio is required in order to fully absorb the effects of food price shocks compared to the corresponding aid-to-GDP ratio.
Year of publication: |
2012-03-01
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Institutions: | International Monetary Fund (IMF) ; International Monetary Fund |
Subject: | Agricultural commodities | Capital inflows | Developing countries | Economic models | External shocks | Price increases | Workers remittances | food price | remittances | remittance | remittance inflows | food imports | food prices | fao | workers ? remittances | food aid | effectiveness of remittances | migration | food import | effects of remittances | data on remittances | bilateral remittances | diaspora | international remittances | capital flows | effect of remittance | food security | remittance data | amount of remittances | food insecurity | total amount of remittances | use of remittances | food safety |
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