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Shaken, not stirred: the impact of disasters on international trade

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Author Info
Martin Gassebner () (Department of Management, Technology and Economics, ETH Zurich (Swiss Federal Institute of Technology), Switzerland)
Alexander Keck () (World Trade Organization (WTO). Economic Research and Statistics Division)
Robert Teh () (World Trade Organization (WTO). Economic Research and Statistics Division)

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Abstract

This paper examines the impact of major disasters on trade flows using a gravity model(170 countries, 1962-2004). As a conservative estimate, an additional disaster reduces imports on average by 0,2% and exports by 0.1%. Despite the apparent persistence of bilateral trade volumes, the impact of catastrophes depends on the democracy level and size of the affected country. In autocracies, exports and imports are significantly reduced: had Togo been struck by a major disaster in 2000, it would have lost 6.8% of its imports and 8.2% of its exports. Democratic countries' exports suffer modest decreases, while imports are hardly affected

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Publisher Info
Paper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 06-139.

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Length: 40 pages
Date of creation: Jun 2006
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Handle: RePEc:kof:wpskof:06-139

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Related research
Keywords: International trade; disasters; gravity model; governance bounds analysis.;

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Find related papers by JEL classification:
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
P48 - Economic Systems - - Other Economic Systems - - - Other Economic Systems: Political Economy; Legal Institutions; Property Rights
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  2. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December. [Downloadable!] (restricted)
  3. 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, 02. [Downloadable!] (restricted)
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  5. Tavares, Jose, 2004. "The open society assesses its enemies: shocks, disasters and terrorist attacks," Journal of Monetary Economics, Elsevier, vol. 51(5), pages 1039-1070, July. [Downloadable!] (restricted)
  6. Rodrik, Dani, 1999. " Where Did All the Growth Go? External Shocks, Social Conflict, and Growth Collapses," Journal of Economic Growth, Springer, vol. 4(4), pages 385-412, December. [Downloadable!] (restricted)
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  7. Auffret, Philippe, 2003. "High consumption volatility : the impact of natural disasters?," Policy Research Working Paper Series 2962, The World Bank. [Downloadable!]
  8. Andrew K. Rose, 2004. "Do We Really Know That the WTO Increases Trade?," American Economic Review, American Economic Association, vol. 94(1), pages 98-114, March. [Downloadable!]
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  9. Freund, Caroline L. & Weinhold, Diana, 2004. "The effect of the Internet on international trade," Journal of International Economics, Elsevier, vol. 62(1), pages 171-189, January. [Downloadable!] (restricted)
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  11. Axel Dreher & Lars Siemers, 2005. "The Intriguing Nexus between Corruption and Capital Account Restrictions," KOF Working papers 05-113, KOF Swiss Economic Institute, ETH Zurich. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Eliza M. Lis & Christiane Nickel, 2009. "The Impact of Extreme Weather Events on Budget Balances and Implications for Fiscal Policy," Working Paper Series 1055, European Central Bank. [Downloadable!]
  2. Bjornskov, Christian & Fischer, Justina AV & Dreher, Axel, 2008. "Formal Institutions and Subjective Well-Being: Revisiting the Cross-Country Evidence," MPRA Paper 17159, University Library of Munich, Germany, revised Jul 2009. [Downloadable!]
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  3. Paul Raschky, 2007. "Estimating the effects of risk transfer mechanisms against floods in Europe and U.S.A.: A dynamic panel approach," Working Papers 2007-05, Faculty of Economics and Statistics, University of Innsbruck. [Downloadable!]
  4. Paul A. Raschky & Manijeh Schwindt, . "Aid, Catastrophes and the Samaritan's Dilemma," Working Papers 2008-06, Faculty of Economics and Statistics, University of Innsbruck. [Downloadable!]
  5. Axel Dreher & Peter Nunnenkamp & Hannes Öhler & Johannes Weisser, 2009. "Acting Autonomously or Mimicking the State and Peers? A Panel Tobit Analysis of Financial Dependence and Aid Allocation by Swiss NGOs," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 1, Courant Research Centre PEG. [Downloadable!]
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