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The Economics of Natural Disasters in a Developing Country: The Case of Vietnam

  • Ilan Noy

    ()

    (Department of Economics, University of Hawaii at Manoa)

  • Tam Bang Vu

    ()

    (College of Business and Economics, University of Hawaii at Hilo)

Registered author(s):

We examine impact of natural disasters on annual output and output growth in Vietnam. Using provincial data for primary and secondary industries in Vietnam, we employ the Blundell-Bond System GMM procedure to estimate the impact of disasters on the macro-economy. Results show that more lethal disasters result in lower output growth but that more costly disasters (in terms of destroyed capital) actually appear to boost the economy in the short-run. This result is consistent with the ‘creative destruction’ hypothesis that we outline. However we find that disasters have different macroeconomic impact in different geographical regions; and these differences are potentially related to the ability to generate transfers from the central government.

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File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_09-3.pdf
File Function: First version, 2009
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Paper provided by University of Hawaii at Manoa, Department of Economics in its series Working Papers with number 200903.

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Length: 28 pages
Date of creation: 01 May 2009
Date of revision:
Handle: RePEc:hai:wpaper:200903
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