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The economics of natural disasters in a developing country: The case of Vietnam

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  • Noy, Ilan
  • Vu, Tam Bang
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Abstract

We examine the impact of natural disasters on annual output growth in Vietnam. Using provincial data for primary and secondary industries, we employ the Blundell-Bond General Method of Moments procedure to estimate the impact of disasters on the macroeconomy. We show that more lethal disasters result in lower output growth but that disasters that destroy more property and capital actually appear to boost the economy in the short-run. This is consistent with the 'investment-producing destruction' hypothesis that we outline. However, we find that disasters have a different macroeconomic impact in different geographical regions; these differences are potentially related to the ability to generate transfers from the Vietnamese central government.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Asian Economics.

Volume (Year): 21 (2010)
Issue (Month): 4 (August)
Pages: 345-354

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Handle: RePEc:eee:asieco:v:21:y:2010:i:4:p:345-354

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Web page: http://www.elsevier.com/locate/asieco

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Keywords: Vietnam Natural disaster Growth Exogenous shocks;

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  1. Matthew E. Kahn, 2005. "The Death Toll from Natural Disasters: The Role of Income, Geography, and Institutions," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 271-284, May.
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  18. Noy, Ilan, 2009. "The macroeconomic consequences of disasters," Journal of Development Economics, Elsevier, vol. 88(2), pages 221-231, March.
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Citations

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Cited by:
  1. Loayza, Norman & Olaberria, Eduardo & Rigolini, Jamele & Christiaensen, Luc, 2009. "Natural disasters and growth - going beyond the averages," Policy Research Working Paper Series 4980, The World Bank.
  2. Vu, Tam Bang & Noy, Ilan, 2013. "Natural disasters and firms in Vietnam," Working Paper Series 3063, Victoria University of Wellington, School of Economics and Finance.
  3. van Bergeijk, P.A.G. & Lazzaroni, S., 2013. "Macroeconomics of natural disasters," ISS Working Papers - General Series 50075, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  4. Kousky, Carolyn, 2012. "Informing Climate Adaptation: A Review of the Economic Costs of Natural Disasters, Their Determinants, and Risk Reduction Options," Discussion Papers dp-12-28, Resources For the Future.
  5. Uchida, Hirofumi & Miyakawa, Daisuke & Hosono, Kaoru & Ono, Arito & Uchino, Taisuke & Uesugi, Iichiro, 2013. "Natural Disaster and Natural Selection," Working Paper Series 25, Center for Interfirm Network, Institute of Economic Research, Hitotsubashi University.
  6. Vu, Tam Bang & Noy, Ilan, 2013. "Regional Effects of Natural Disasters in China," Working Paper Series 2812, Victoria University of Wellington, School of Economics and Finance.

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