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Are Foreign Aid and Remittances a Hedge against Food Price Shocks in Developing Countries?

Author

Listed:
  • Jean-Louis Combes

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

  • Christian Hubert Ebeke

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

  • Mireille S. Ntsama Etoundi

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

  • Urbain Thierry Yogo

    (UY1 - Université de Yaoundé I)

Abstract
This paper measures the effects of food price shocks on both the level of household consumption per capita and the instability of the household consumption per capita growth rate in developing countries. In this vein, the paper explores the role of aid and remittance inflows in the mitigation of the effects of food price shocks in the recipient economies. Using a large sample of developing countries observed over the period 1980-2009 and mobilising dynamic panel data specifications, the econometric results yield three important findings. First, food price shocks significantly affect both the level and the instability of household consumption in highly vulnerable countries. Second, remittance and aid inflows significantly dampen the effect of food price shocks in the most vulnerable countries. Third, 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.

Suggested Citation

  • Jean-Louis Combes & Christian Hubert Ebeke & Mireille S. Ntsama Etoundi & Urbain Thierry Yogo, 2012. "Are Foreign Aid and Remittances a Hedge against Food Price Shocks in Developing Countries?," CERDI Working papers halshs-00608128, HAL.
    • Handle: RePEc:hal:cdiwps:halshs-00608128
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00608128v2
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    References listed on IDEAS

    as
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Aid and remittances as hedges against food price shocks
      by Economic Logician in Economic Logic on 2011-08-03 19:21:00

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    Cited by:

    1. Mthuli Ncube & Zuzana Brixiova, 2013. "Working Paper 188 - Remittances and their Macroeconomic Impact: Evidence from Africa," Working Paper Series 996, African Development Bank.
    2. Giulia Bettin & Andrea F. Presbitero & Nikola L. Spatafora, 2017. "Remittances and Vulnerability in Developing Countries," The World Bank Economic Review, World Bank, vol. 31(1), pages 1-23.
    3. Alexandra T Tapsoba & Pascale Combes Motel & Jean-Louis Combes, 2019. "Remittances, food security and climate variability: The case of Burkina Faso," CERDI Working papers halshs-02364775, HAL.
    4. Narges Ebadi & Davod Ahmadi & Ibrahim Sirkeci & Hugo Melgar-Quiñonez, 2018. "The Impact of Remittances on Food Security Status in the Global South," Remittances Review, Remittances Review, vol. 3(2), pages 135-150, October.
    5. Andrea Filippo Presbitero, 2013. "Aid and Vulnerability," Mo.Fi.R. Working Papers 88, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    6. Supriyo De & Ergys Islamaj & M. Ayhan Kose & S. Reza Yousefi, 2019. "Remittances over the business cycle: Theory and evidence," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 48(3), November.
    7. Dorsaf Sridi & Imene Guetat, 2020. "The direct and indirect risk impacts on remittances: A cross‐regional specific effects," African Development Review, African Development Bank, vol. 32(3), pages 288-302, September.
    8. Badolo, Felix & Kinda, Somlanare Romuald, 2012. "Climatic shocks and food security in developing countries," MPRA Paper 43006, University Library of Munich, Germany.

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