Natural natural disasters and economic disruption
The cost of natural calamities is not limited to direct capital losses. Economies in the wake of severe shocks experience important slowdowns. I construct an exhaustive dataset of objective measures on cyclones and earthquakes worldwide between 1980 and 2006 and complement existing reports on direct damages. I then estimate the amplitude of indirect economic losses in the aftermath of catastrophes. Declared damages accounting for 1% of GDP are associated with a slowdown of .05 to .06 points of GDP growth. The economic slack piles up to .4 points of GDP when I instrument by actual exposure to alleviate censorship issues and declaration biases. This output loss is superior to what would suggest a model of labor frictions and capital losses and points to large business disruptions. Finally, the objective measures happen to be better at predicting the economic slack than estimations from officials.
|Date of creation:||Oct 2010|
|Date of revision:|
|Note:||View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00564946|
|Contact details of provider:|| Web page: http://hal.archives-ouvertes.fr/|
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.:
- Noy, Ilan, 2009.
"The macroeconomic consequences of disasters,"
Journal of Development Economics,
Elsevier, vol. 88(2), pages 221-231, March.
- Mark Skidmore & Hideki Toya, 2005.
"Economic Development and the Impacts of Natural Disasters,"
05-04, UW-Whitewater, Department of Economics.
- Toya, Hideki & Skidmore, Mark, 2007. "Economic development and the impacts of natural disasters," Economics Letters, Elsevier, vol. 94(1), pages 20-25, January.
- Strobl, Eric, 2012. "The economic growth impact of natural disasters in developing countries: Evidence from hurricane strikes in the Central American and Caribbean regions," Journal of Development Economics, Elsevier, vol. 97(1), pages 130-141.
- Mark Skidmore & Hideki Toya, 2002. "Do Natural Disasters Promote Long-Run Growth?," Economic Inquiry, Western Economic Association International, vol. 40(4), pages 664-687, October.
- Ramcharan, Rodney, 2007. "Does the exchange rate regime matter for real shocks? Evidence from windstorms and earthquakes," Journal of International Economics, Elsevier, vol. 73(1), pages 31-47, September.
- 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, May.
- Dean Yang & HwaJung Choi, 2005.
"Are Remittances Insurance? Evidence from Rainfall Shocks in the Philippines,"
535, Research Seminar in International Economics, University of Michigan.
- HwaJung Choi, 2007. "Are Remittances Insurance? Evidence from Rainfall Shocks in the Philippines," World Bank Economic Review, World Bank Group, vol. 21(2), pages 219-248, May.
- Tobias N. Rasmussen, 2004. "Macroeconomic Implications of Natural Disasters in the Caribbean," IMF Working Papers 04/224, International Monetary Fund.
- Albala-Bertrand, J. M., 1993. "Natural disaster situations and growth: A macroeconomic model for sudden disaster impacts," World Development, Elsevier, vol. 21(9), pages 1417-1434, September.
When requesting a correction, please mention this item's handle: RePEc:hal:psewpa:halshs-00564946. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD)
If references are entirely missing, you can add them using this form.