{
  "title": "Smooth Operator: Remittances and Fiscal Shocks",
  "publication": "IMF Working Papers, July 19, 2017",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2017/07/19/smooth-operator-remittances-and-fiscal-shocks-45022",
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  "summary": "With 250 million migrants globally, remittances are one of the major sources of income in many developing countries. While there is abundant evidence that remittances facilitate consumption smoothing in receving countries, the literature has not considered whether this effect varies with the fiscal",
  "sections": [
    {
      "heading": "Background",
      "content": "- With 250 million migrants globally, remittances are one of the major sources of income in many developing countries.\n- The literature documents that remittances facilitate consumption smoothing in receiving countries, but prior work had not considered variation with fiscal stance or during fiscal shocks."
    },
    {
      "heading": "Research focus and methodology",
      "content": "- Investigates the impact of remittances on the stability of household consumption using both cross-country and household-level datasets.\n- Focuses on:\n  - Whether the consumption-smoothing effect changes with fiscal policy phases (fiscal consolidation versus fiscal expansion).\n  - Whether remittances and government support are substitutes or complements in stabilizing household consumption."
    },
    {
      "heading": "Key findings",
      "content": "- Remittances help smooth consumption, and hence improve welfare, more during fiscal consolidation episodes.\n- The consumption-smoothing impact of remittances is insignificant during fiscal expansions.\n- The remittance-smoothing effect is more pronounced in countries with greater reliance on remittances."
    },
    {
      "heading": "Policy implications and interpretation",
      "content": "- During fiscal consolidations, remittances play a stronger role as a private buffer for household consumption when public support is constrained.\n- In fiscal expansions, government support appears to lessen the incremental consumption-smoothing role of remittances (effect statistically insignificant).\n- Policy design in high-remittance countries should account for the complementary role remittances can play in stabilizing household consumption, especially when fiscal space tightens.\n\nIMF Working Paper \"Smooth Operator: Remittances and Fiscal Shocks\", Kimberly Beaton, Serhan Cevik, and Reza Yousefi; July 19, 2017.\n\n---\n\n Content in this bundle\n\n- Smooth Operator: Remittances and Fiscal Shocks\n  - Smooth Operator: Remittances and Fiscal Shocks (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Smooth Operator: Remittances and Fiscal Shocks (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2017/07/19/smooth-operator-remittances-and-fiscal-shocks-45022"
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    "Authors: Kimberly Beaton, Serhan Cevik, Reza Yousefi",
    "Published: July 19, 2017",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781484307878.001",
    "With 250 million migrants globally, remittances are one of the major sources of income in many developing countries.",
    "The literature documents that remittances facilitate consumption smoothing in receiving countries, but prior work had not considered variation with fiscal stance or during fiscal shocks.",
    "Investigates the impact of remittances on the stability of household consumption using both cross-country and household-level datasets.",
    "Focuses on:",
    "Remittances help smooth consumption, and hence improve welfare, more during fiscal consolidation episodes.",
    "The consumption-smoothing impact of remittances is insignificant during fiscal expansions.",
    "The remittance-smoothing effect is more pronounced in countries with greater reliance on remittances.",
    "During fiscal consolidations, remittances play a stronger role as a private buffer for household consumption when public support is constrained.",
    "In fiscal expansions, government support appears to lessen the incremental consumption-smoothing role of remittances (effect statistically insignificant).",
    "Policy design in high-remittance countries should account for the complementary role remittances can play in stabilizing household consumption, especially when fiscal space tightens.",
    "**Smooth Operator: Remittances and Fiscal Shocks**"
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