Catastrophic Natural Disasters and Economic Growth
This paper examines the short and long-run average causal impact of catastrophic natural disasters on economic growth by combining information from comparative case studies. The counterfactual of the cases studied is assessed by constructing synthetic control groups, taking advantage of the fact that the timing of large sudden natural disasters is an exogenous event. It is found that only extremely large disasters have a negative effect on output, both in the short and long run. However, this result appears in two events where radical political revolutions followed the natural disasters. Once these political changes are controlled for, even extremely large disasters do not display any significant effect on economic growth. It is also found that smaller, but still very large natural disasters, have no discernible effect on output.
|Date of creation:||Jun 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.iadb.org/publications/Email:
More information through EDIRC
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.:
- Raddatz, Claudio, 2005.
"Are external shocks responsible for the instability of output in low income countries?,"
Policy Research Working Paper Series
3680, The World Bank.
- Raddatz, Claudio, 2007. "Are external shocks responsible for the instability of output in low-income countries?," Journal of Development Economics, Elsevier, vol. 84(1), pages 155-187, September.
- Dean Yang, 2006.
"Coping with Disaster: The Impact of Hurricanes on International Financial Flows, 1970-2002,"
NBER Working Papers
12794, National Bureau of Economic Research, Inc.
- Yang Dean, 2008. "Coping with Disaster: The Impact of Hurricanes on International Financial Flows, 1970-2002," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-45, June.
- Caballero, R.J. & Hammour, M.L., 1991.
"The Cleansing Effect of Recessions,"
1991_59, Columbia University, Department of Economics.
- 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.
- Mankiw, N Gregory & Romer, David & Weil, David N, 1992.
"A Contribution to the Empirics of Economic Growth,"
The Quarterly Journal of Economics,
MIT Press, vol. 107(2), pages 407-37, May.
- Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472 Elsevier.
- Noy, Ilan, 2009.
"The macroeconomic consequences of disasters,"
Journal of Development Economics,
Elsevier, vol. 88(2), pages 221-231, March.
- Eduardo Cavallo & Ilan Noy, 2009.
"The Economics of Natural Disasters: A Survey,"
Research Department Publications
4649, Inter-American Development Bank, Research Department.
- Eduardo Cavallo & Ilan Noy, 2009. "The Economics of Natural Disasters - A Survey," Working Papers 200919, University of Hawaii at Manoa, Department of Economics.
- Eduardo A. Cavallo & Ilan Noy, 2009. "The Economics of Natural Disasters: A Survey," IDB Publications (Working Papers) 6779, Inter-American Development Bank.
- Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of Californiaâ€™s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
- Barro, Robert, 2006. "Rare Disasters and Asset Markets in the Twentieth Century," Scholarly Articles 3208215, Harvard University Department of Economics.
- Robert J. Barro, 2009.
"Rare Disasters, Asset Prices, and Welfare Costs,"
American Economic Review,
American Economic Association, vol. 99(1), pages 243-64, March.
When requesting a correction, please mention this item's handle: RePEc:idb:brikps:6818. 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: (Monica Bazan)
If references are entirely missing, you can add them using this form.