01849cas a2200241 a 4500 AALejournalIMF015061 230101c9999 xx r poo 0 0eng d 5.00 USD 9781498300940 1018-5941 BD-DhAAL BD-DhAAL Jidoud, Ahmat. Remittances and Macroeconomic Volatility in African Countries / Ahmat Jidoud. Washington, D.C. : International Monetary Fund, 2015. 1 online resource (37 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 This paper investigates the channels through which remittances affect macroeconomic volatility in African countries using a dynamic stochastic general equilibrium (DSGE) model augmented with financial frictions. Empirical results indicate that remittances-as a share of GDP-have a significant smoothing impact on output volatility but their impact on consumption volatility is somewhat small. Furthermore, remittances are found to absorb a substantial amount of GDP shocks in these countries. An investigation of the theoretical channels shows that the stabilization impact of remittances essentially hinges on two channels: (i) the size of the negative wealth effect on labor supply induced by remittances and, (ii) the strength of financial frictions and the ability of remittances to alleviate these frictions. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2015/049 Full text available on IMF http://elibrary.imf.org/view/journals/001/2015/049/001.2015.issue-049-en.xml IMF e-Library