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Are Remittances and Foreign Aid 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

    (FMI - Fond Monétaire International - FMI)

  • 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

    (Université de Yaoundé II)

Abstract

This paper explores the role of remittances and foreign aid inflows during food price shocks. The results yield four findings. First, low income countries and the Sub-Saharan African region are the most vulnerable to food price shocks. Second, remittance and aid inflows dampen the effect of positive food price shock and food price instability on household consumption in vulnerable countries. Third, negative food price shock episodes are associated with a significant increase in household consumption in vulnerable countries. Fourth, a lower remittance-to-GDP ratio is required in order to fully absorb the effects of food price shocks.

Suggested Citation

  • Jean-Louis Combes & Christian Hubert Ebeke & Mireille S. Ntsama Etoundi & Urbain Thierry Yogo, 2014. "Are Remittances and Foreign Aid a Hedge Against Food Price Shocks in Developing Countries?," Post-Print halshs-00913164, HAL.
    • Handle: RePEc:hal:journl:halshs-00913164
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    References listed on IDEAS

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