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The Impact of Disasters on Inflation

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  • Miles Parker

    (Reserve Bank of New Zealand
    European Central Bank)

Abstract

This paper studies how disasters affect consumer price inflation. There is a marked heterogeneity in the impact between advanced economies, where the impact is negligible, and developing economies, where the impact can last for several years. There are also differences in the impact by type of disasters, particularly when considering inflation sub-indices. Storms increase food price inflation in the near term, although the effect dissipates within a year. Floods also typically have a short-run impact on inflation. Earthquakes reduce CPI inflation excluding food, housing and energy.

Suggested Citation

  • Miles Parker, 2018. "The Impact of Disasters on Inflation," Economics of Disasters and Climate Change, Springer, vol. 2(1), pages 21-48, April.
    • Handle: RePEc:spr:ediscc:v:2:y:2018:i:1:d:10.1007_s41885-017-0017-y
    DOI: 10.1007/s41885-017-0017-y
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    More about this item

    Keywords

    Disasters; Inflation;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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