02243cas a2200265 a 4500 AALejournalIMF005764 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451872385 1018-5941 BD-DhAAL BD-DhAAL Hakura, Dalia. Remittances : An Automatic Output Stabilizer? / Dalia Hakura, Ralph Chami, Peter Montiel. Washington, D.C. : International Monetary Fund, 2009. 1 online resource (31 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Remittance flows appear to be falling worldwide for the first time in decades as a result of the ongoing financial turmoil. It is suspected that the drop in remittance income into developing and emerging markets will have a destabilizing effect on these economies. The paper estimates the impact of remittances on output stability for countries that are dependent on these income flows. Using a sample of 70 countries, including 16 advanced economies and 54 developing countries, we find robust evidence that remittances have a negative effect on output growth volatility of recipient countries. This result supports the notion that remittance flows are a stabilizing influence on output. Thus, the fall in remittances precipitated by the ongoing global financial crisis could potentially increase output variability in recipient countries. This would present a hard challenge for governments in those countries already suffering from the crisis: they must resort to an already stressed and limited set of policy instruments, such as fiscal policy, to counter the resulting adverse economic and social impacts of lower remittances. Mode of access: Internet Chami, Ralph. Montiel, Peter. IMF Working Papers; Working Paper ; No. 2009/091 Full text available on IMF http://elibrary.imf.org/view/journals/001/2009/091/001.2009.issue-091-en.xml IMF e-Library