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The Growth Impact of Disasters in Developing Asia

Author

Listed:
  • Dagli , Suzette

    (Asian Development Bank)

  • Ferrarini, Benno

    (Asian Development Bank)

Abstract

This paper estimates the growth impact of disasters, with a focus on developing Asia and its subregions. It finds that severe disasters slow down annual growth in the Pacific island countries by between 1 and 2 percentage points on average. This should come as no surprise, given these economies’ extreme exposure, structural vulnerability, and small size relative to the footprint of major natural hazards. The growth impact is less clear for other regions and worldwide, mainly because disaster effects tend to be highly localized and get diluted in the context of cross-country regressions with nationwide growth as the unit of analysis.

Suggested Citation

  • Dagli , Suzette & Ferrarini, Benno, 2019. "The Growth Impact of Disasters in Developing Asia," ADB Economics Working Paper Series 585, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0585
    as

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    References listed on IDEAS

    as
    1. Noy, Ilan, 2009. "The macroeconomic consequences of disasters," Journal of Development Economics, Elsevier, vol. 88(2), pages 221-231, March.
    2. Toya, Hideki & Skidmore, Mark, 2007. "Economic development and the impacts of natural disasters," Economics Letters, Elsevier, vol. 94(1), pages 20-25, January.
    3. Loayza, Norman V. & Olaberría, Eduardo & Rigolini, Jamele & Christiaensen, Luc, 2012. "Natural Disasters and Growth: Going Beyond the Averages," World Development, Elsevier, vol. 40(7), pages 1317-1336.
    4. Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June.
    5. Christian R. Jaramillo H., 2007. "Natural disasters and growth: evidence using a wide panel of countries," Documentos CEDE 3927, Universidad de los Andes, Facultad de Economía, CEDE.
    6. Dongyeol Lee & Huan Zhang & Chau Nguyen, 2018. "The Economic Impact of Natural Disasters in Pacific Island Countries: Adaptation and Preparedness," IMF Working Papers 2018/108, International Monetary Fund.
    7. 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.
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    Cited by:

    1. Lochan Kumar Batala & Wangxing Yu & Anwar Khan & Kalpana Regmi & Xiaoli Wang, 2021. "Natural disasters' influence on industrial growth, foreign direct investment, and export performance in the South Asian region of Belt and road initiative," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 108(2), pages 1853-1876, September.

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    More about this item

    Keywords

    developing Asia; disasters; economic growth; natural hazards;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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