Catastrophic Natural Disasters and Economic Growth

Eduardo Cavallo, Sebastian Galiani, Ilan Noy and Juan Pantano ()
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Juan Pantano: Washington University in St. Louis

No 201006, Working Papers from University of Hawaii at Manoa, Department of Economics

Abstract: We examine the short and long run average causal impact of catastrophic natural disasters on economic growth by combining information from comparative case studies. We assess the counterfactual of the cases studied by constructing synthetic control groups taking advantage of the fact that the timing of large sudden natural disasters is an exogenous event. We find that only extremely large disasters have a negative effect on output both in the short and long run. However, we also show that this result from two events where radical political revolutions followed the natural disasters. Once we control for these political changes, even extremely large disasters do not display any significant effect on economic growth. We also find that smaller, but still very large natural disasters, have no discernible effect on output in the short run or in the long run.

Keywords: Natural Disasters; Political Change; Economic Growth and Causal Effects. (search for similar items in EconPapers)
JEL-codes: O40 O47 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2010-04-28
New Economics Papers: this item is included in nep-dev, nep-ene, nep-env, nep-fdg, nep-hea, nep-lam and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (58)

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http://www.economics.hawaii.edu/research/workingpapers/WP_10-6.pdf First version, 2010 (application/pdf)

Related works:
Journal Article: Catastrophic Natural Disasters and Economic Growth (2013)
Working Paper: Catastrophic Natural Disasters and Economic Growth (2010)
Working Paper: Catastrophic Natural Disasters and Economic Growth (2010)
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