The Growth Aftermath of Natural Disasters
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This paper provides a description of the
macroeconomic aftermath of natural disasters. It traces the
yearly response of gross domestic product growth - both
aggregated and disaggregated into its agricultural and
non-agricultural components - to four types of natural
disasters - droughts, floods, earthquakes, and storms. The
paper uses a methodological approach based on pooling the
experiences of various countries over time. It consists of
vector auto-regressions in the presence of endogenous
variables and exogenous shocks (VARX), applied to a panel of
cross-country and time-series data. The analysis finds
heterogeneous effects on a variety of dimensions. First, the
effects of natural disasters are stronger, for better or
worse, on developing than on rich countries. Second, while
the impact of some natural disasters can be beneficial when
they are of moderate intensity, severe disasters never have
positive effects. Third, not all natural disasters are alike
in terms of the growth response they induce, and, perhaps
surprisingly, some can entail benefits regarding economic
growth. Thus, droughts have a negative effect on both
agricultural and non-agricultural growth. In contrast,
floods tend to have a positive effect on economic growth in
both major sectors. Earthquakes have a negative effect on
agricultural growth but a positive one on non-agricultural
growth. Storms tend to have a negative effect on gross
domestic product growth but the effect is short-lived and
small. Future research should concentrate on exploring the
mechanisms behind these heterogeneous impacts.
Palabras clave
AGRICULTURAL GROWTH, AGRICULTURAL SECTOR, AVALANCHES, AVERAGE GROWTH, AVERAGE GROWTH RATE, BUSINESS CYCLE, BUSINESS CYCLES, CAPITAL ACCUMULATION, CASUALTIES, CATASTROPHIC EVENTS, CENTRE FOR RESEARCH ON THE EPIDEMIOLOGY, COUNTRY SPECIFICITY, COVARIANCE MATRIX, CRED, CROSS-COUNTRY ANALYSIS, DAMAGES, DAT DATABASE, DECLARATION, DESCRIPTIVE STATISTICS, DEVELOPED COUNTRIES, DEVELOPING COUNTRIES, DEVELOPMENT ECONOMICS, DEVELOPMENT INDICATORS, DEVELOPMENT RESEARCH, DISASTER, DISASTER EVENTS, DISASTER REDUCTION, DISASTER RISK, DISASTER RISK REDUCTION, DISASTER TYPE, DIVERSIFICATION, DROUGHT, DROUGHTS, EARTHQUAKE, EARTHQUAKES, ECONOMIC ACTIVITY, ECONOMIC BEHAVIOR, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC PERFORMANCE, ECONOMICS, ECONOMICS LETTERS, EDUCATIONAL ATTAINMENT, ENDOGENOUS VARIABLES, ERROR TERMS, EXPLANATORY VARIABLES, EXTERNAL CONDITIONS, EXTERNAL SHOCKS, FAMINES, FINANCIAL CONDITIONS, FINANCIAL SECTOR, FIRES, FIXED EFFECTS, FLOOD, FLOODS, GOVERNMENT SPENDING, GROSS DOMESTIC PRODUCT, GROWTH EFFECT, GROWTH IMPACT, GROWTH MODEL, GROWTH PERFORMANCE, GROWTH RATE, GROWTH RATES, HUMAN CAPITAL, INSECT INFESTATIONS, INTERNATIONAL MONETARY FUND, LABOR FORCE, LANDSLIDES, LEVEL OF DEVELOPMENT, LONG-RUN GROWTH, LOW-INCOME COUNTRIES, MACROECONOMIC OUTCOMES, MONOTONIC EFFECTS, NATURAL DISASTER, NATURAL DISASTERS, NATURAL HAZARDS, NEGATIVE EFFECT, NEGATIVE IMPACT, 0 HYPOTHESIS, OUTPUT VOLATILITY, PER CAPITA GROWTH, PER CAPITA INCOME, POLICY RESEARCH, PROMOTING GROWTH, PUBLIC INFRASTRUCTURE, RECESSIONS, RECONSTRUCTION, REGRESSION ANALYSIS, REGRESSION MODEL, RICH COUNTRIES, SIGNIFICANT EFFECT, STANDARD ERRORS, STORM, STORMS, TRADE OPENNESS, TRADE SHOCKS, TSUNAMIS, TYPE OF DISASTER, TYPE OF DISASTERS, URBAN AREAS, VOLCANIC ERUPTIONS, VOLCANO, WEALTH, WIND STORMS