Catastrophic Natural Disasters and Economic Growth
AbstractWe examine the short and long run average causal impact of catastrophic natural disasters on economic growth by combining information from comparative case studies. We assess the counterfactual of the cases studied by constructing synthetic control groups taking advantage of the fact that the timing of large sudden natural disasters is an exogenous event. We find that only extremely large disasters have a negative effect on output both in the short and long run. However, we also show that this result from two events where radical political revolutions followed the natural disasters. Once we control for these political changes, even extremely large disasters do not display any significant effect on economic growth. We also find that smaller, but still very large natural disasters, have no discernible effect on output in the short run or in the long run.
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Bibliographic InfoPaper provided by University of Hawaii at Manoa, Department of Economics in its series Working Papers with number 201006.
Length: 31 pages
Date of creation: 28 Apr 2010
Date of revision:
Other versions of this item:
- Eduardo Cavallo & Sebastian Galiani & Ilan Noy & Juan Pantano, 2013. "Catastrophic Natural Disasters and Economic Growth," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1549-1561, December.
- Eduardo Cavallo & Sebastian Galiani & Ilan Noy & Juan Pantano, 2010. "Catastrophic Natural Disasters and Economic Growth," Research Department Publications 4671, Inter-American Development Bank, Research Department.
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-04 (All new papers)
- NEP-DEV-2010-06-04 (Development)
- NEP-ENE-2010-06-04 (Energy Economics)
- NEP-ENV-2010-06-04 (Environmental Economics)
- NEP-FDG-2010-06-04 (Financial Development & Growth)
- NEP-HEA-2010-06-04 (Health Economics)
- NEP-LAM-2010-06-04 (Central & South America)
- NEP-RES-2010-06-04 (Resource Economics)
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