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Remittances and Vulnerability in Developing Countries
Author:
Giulia Bettin null

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Mr. Andrea F Presbitero
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https://orcid.org/0000-0003-4622-941X
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Mr. Nikola Spatafora
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Series:
IMF Working Papers
Volume/Issue:
Volume 2014: Issue 013
Language:
English
Publication Date:
27 Jan 2014
DOI:
https://doi.org/10.5089/9781484385081.001
ISBN:
9781484385081
ISSN:
1018-5941
Pages:
33
Keywords:
WP; remittance corridor; bilateral remittance; remittances outflow; transfer cost; remittance inflow; Remittances; Shocks; Business cycle; Vulnerability; Gravity model; Migration; Financial sector development; Business cycles; Global financial crisis of 2008-2009; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper examines how international remittances are affected by structural characteristics, macroeconomic conditions, and adverse shocks in both source and recipient economies. We exploit a novel, rich panel data set, covering bilateral remittances from 103 Italian provinces to 107 developing countries over the period 2005-2011. We find that remittances are negatively correlated with the business cycle in recipient countries, and increase in response to adverse exogenous shocks, such as natural disasters or large declines in the terms of trade. Remittances are positively correlated with economic conditions in the source province. Nevertheless, in the presence of similar negative shocks to both source and recipient economies, remittances remain counter-cyclical with respect to the recipient country.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund