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Shaken, not stirred: the impact of disasters on international trade

  • Martin Gassebner

    ()

    (Department of Management, Technology and Economics, ETH Zurich (Swiss Federal Institute of Technology), Switzerland)

  • Alexander Keck

    ()

    (World Trade Organization (WTO). Economic Research and Statistics Division)

  • Robert Teh

    ()

    (World Trade Organization (WTO). Economic Research and Statistics Division)

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

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Paper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 06-139.

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Length: 40 pages
Date of creation: Jun 2006
Date of revision:
Handle: RePEc:kof:wpskof:06-139
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