2014年-IMF国际货币组织全球_Remittances_and_Vulnerability_in_Developing_Countries_33页_818kb

Summary of "Remittances and Vulnerability in Developing Countries"

Core Content

This working paper investigates the impact of international remittances on developing countries, focusing on how these flows respond to structural characteristics, macroeconomic conditions, and adverse shocks in both source and recipient economies. The authors use a novel, rich panel dataset covering bilateral remittances from 103 Italian provinces to 107 developing countries between 2005 and 2011 to estimate a gravity model for remittances.

Main Contributions

1. Counter-cyclical Nature of Remittances

   • Remittances are negatively correlated with the business cycle in recipient countries.
   • They increase strongly in response to adverse exogenous shocks, such as natural disasters or large declines in the terms of trade.
   • Remittances are positively correlated with potential GDP in recipient countries.
   • Despite similar negative shocks in both source and recipient economies, remittances remain counter-cyclical with respect to the recipient country.

2. Source Province Economic Conditions

   • Remittances are positively correlated with economic conditions in the source province.
   • The authors find that remittances are positively associated with financial development in the source province, suggesting that better financial systems reduce transaction costs and ease access to remittance services.

3. Financial Development in Recipient Countries

   • Remittances are negatively associated with financial development in the recipient country.
   • This implies that remittances may help alleviate credit constraints in developing countries.

Key Findings

• Remittances act as a shock absorber, helping to smooth consumption and stabilize output during economic downturns.
• The counter-cyclical behavior of remittances contrasts with the typically pro-cyclical nature of private capital flows.
• The paper provides new evidence on the relationship between remittances and the business cycle, using a large, bilateral dataset that allows for a more comprehensive analysis.
• The authors address endogeneity concerns by focusing on remittances from Italian provinces rather than aggregate inflows, reducing potential reverse causality issues.
• The gravity model is estimated using a Poisson Pseudo-Maximum Likelihood approach to account for the presence of non-random zeros in the data.

Methodology

• A gravity model is used to estimate bilateral remittances, incorporating variables such as:

  • Cyclical and trend components of GDP per capita in both source and recipient countries.
  • Bilateral migrant stock and its growth rate.
  • Distance between provinces and recipient countries.
  • Population levels in both regions.
  • Vulnerability indicators such as natural disasters, armed conflicts, and terms of trade shocks.
  • Financial development indicators for both source and recipient countries.

• The dataset includes formal remittances and excludes informal flows.

• Fixed effects are used to control for unobservables at the country, province, and time levels.

• The Hodrick-Prescott filter is applied to extract cyclical and trend components of GDP.

Data Sources

• Bilateral remittances: From the Bank of Italy, covering 103 Italian provinces and 107 developing countries for 2005–2011.
• Migrant stocks: From ISTAT, providing the number of foreign residents in each Italian province.
• Distance: Calculated using geographical coordinates of administrative capitals.
• GDP and population data: From the IMF World Economic Outlook and World Development Indicators.
• Vulnerability indicators: Natural disasters from EM-DAT, armed conflicts from UCDP/PRIO dataset, and terms of trade data from the IMF.
• Financial development: Measured by domestic credit to the private sector as a share of GDP.

Policy Implications

• The paper highlights the resilience of remittances during financial crises, suggesting they can provide a buffer against economic volatility.
• It underscores the importance of financial infrastructure in both source and recipient countries in shaping remittance flows.
• The findings support the view that remittances are not only driven by altruism but also by investment motives, depending on the economic context.