TY - JOUR
T1 - Rainfall, financial development, and remittances
T2 - Evidence from Sub-Saharan Africa
AU - Arezki, Rabah
AU - Brückner, Markus
PY - 2012/7
Y1 - 2012/7
N2 - We use annual variations in rainfall to examine the effects that exogenous, transitory income shocks have on remittances in a panel of 41 Sub-Saharan African countries during the period 1970-2007. Our main finding is that on average rainfall shocks have an insignificant contemporaneous effect on remittances. However, the marginal effect is significantly decreasing in the share of domestic credit to GDP. So much so, that at high levels of credit to GDP rainfall shocks have a significant negative effect on remittances, while at low levels of credit to GDP the effect of rainfall on remittances is significantly positive.
AB - We use annual variations in rainfall to examine the effects that exogenous, transitory income shocks have on remittances in a panel of 41 Sub-Saharan African countries during the period 1970-2007. Our main finding is that on average rainfall shocks have an insignificant contemporaneous effect on remittances. However, the marginal effect is significantly decreasing in the share of domestic credit to GDP. So much so, that at high levels of credit to GDP rainfall shocks have a significant negative effect on remittances, while at low levels of credit to GDP the effect of rainfall on remittances is significantly positive.
KW - Financial development
KW - Remittances
KW - Transitory income shocks
UR - http://www.scopus.com/inward/record.url?scp=84862569563&partnerID=8YFLogxK
U2 - 10.1016/j.jinteco.2011.12.010
DO - 10.1016/j.jinteco.2011.12.010
M3 - Article
SN - 0022-1996
VL - 87
SP - 377
EP - 385
JO - Journal of International Economics
JF - Journal of International Economics
IS - 2
ER -