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Earthquakes and Economic Growth

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  • Peter Simonsen

    () (Institute for Advanced Development Studies)

Abstract

This study explores the economic consequences of earthquakes. In particular, it is investigated how exposure to earthquakes aects economic growth both across and within countries. The key result of the empirical analysis is that while there are no observable eects at the country level, earthquake exposure signicantly decreases 5-year economic growth at the local level. Areas at lower stages of economic development suer harder in terms of economic growth than richer areas. In addition, the analysis proposes an explanation to the paradox that there is a pronounced negative eect at the regional level while no eect appears at the country level. To this end, the eects of earthquake exposure is investigated not only for the impact zones, but also for areas with an average distance to the epicenter of around 100 km. The results indicate that the decrease in production in one part of a country is (partially) o-set by an increase in production in the surrounding regions.

Suggested Citation

  • Peter Simonsen, 2012. "Earthquakes and Economic Growth," Development Research Working Paper Series 01/2012, Institute for Advanced Development Studies.
  • Handle: RePEc:adv:wpaper:201201
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    File URL: http://www.inesad.edu.bo/pdf/wp2012/wp01_2012.pdf
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    References listed on IDEAS

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    Cited by:

    1. Tam B. Vu & Ilan Noy, 2018. "Natural Disasters and Firms in Vietnam," Pacific Economic Review, Wiley Blackwell, vol. 23(3), pages 426-452, August.
    2. Peter A. G. van Bergeijk & Sara Lazzaroni, 2015. "Macroeconomics of Natural Disasters: Strengths and Weaknesses of Meta‐Analysis Versus Review of Literature," Risk Analysis, John Wiley & Sons, vol. 35(6), pages 1050-1072, June.
    3. Jeanet Sinding Bentzen, 2019. "Acts of God? Religiosity and Natural Disasters Across Subnational World Districts," Economic Journal, Royal Economic Society, vol. 129(622), pages 2295-2321.
    4. 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.

    More about this item

    Keywords

    Economic growth; naturaldisasters; spatial distribution;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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