The impact of personal remittance on volatility in private consumption: Empirical study at Pacific Asia

Abstract

We used data from the World Development Indicators report of World Bank for the period from 2002 to 2013 for 25
countries in Asia Pacific to examine the impacts of personal remittances and volatility of remittances on volatility of
private consumption. Through GMM estimation for panel data, we found that the increasing in the value of remittances
will increase the volatility of private consumption, while the volatility of remittances reduces the volatility of private
consumption, but these impacts are reversed in the period of crisis. Besides, the volatility of government consumption,
trade openness and foreign direct investment increase the volatility of private consumption, and these results are no
longer statistically significant in the period of crisis.