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Shaken, Not Stirred: The Impact of Disasters on International Trade

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Listed:
  • Martin Gassebner
  • Alexander Keck
  • Robert Teh

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.

Suggested Citation

  • Martin Gassebner & Alexander Keck & Robert Teh, 2006. "Shaken, Not Stirred: The Impact of Disasters on International Trade," KOF Working papers 06-139, KOF Swiss Economic Institute, ETH Zurich.
  • Handle: RePEc:kof:wpskof:06-139
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    File URL: http://dx.doi.org/10.3929/ethz-a-005229540
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    More about this item

    Keywords

    International trade; Disasters; Gravity model; Governance;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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