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Remittances and Macroeconomic Volatility in African Countries, Ahmat Jidoud

Abstract
This paper investigates the channels through which remittances affect macroeconomic volatility in African countries using a dynamic stochastic general equilibrium (DSGE) model augmented with financial frictions. Empirical results indicate that remittances—as a share of GDP—have a significant smoothing impact on output volatility but their impact on consumption volatility is somewhat small. Furthermore, remittances are found to absorb a substantial amount of GDP shocks in these countries. An investigation of the theoretical channels shows that the stabilization impact of remittances essentially hinges on two channels: (i) the size of the negative wealth effect on labor supply induced by remittances and, (ii) the strength of financial frictions and the ability of remittances to alleviate these frictions
Table Of Contents
Cover; ABSTRACT; CONTENTS; I. INTRODUCTION; II. LITERATURE REVIEW; FIGURES; 1..Remittances and Other Financial Flows in SSA; 2. Volatility of Financial Flows to Africa (Coefficient of Variation); III. EMPIRICAL EVIDENCE; A. Remittances and Macroeconomic Volatility; TABLES; 1. Business Cycle Fluctuations and Remittances; 2. Macroeconomic Fluctuations and Remittances, GLS Estimation; B. Remittances and Risk Sharing; IV. A SMALL OPEN ECONOMY MODEL WITH REMITTANCES; A. The Theoretical Model; 3. Remittances and Risk Sharing; B. International Financial Markets and the Role of Remittances
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (38 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781498357258

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