Catastrophic Natural Disasters and Economic Growth

Eduardo Cavallo, Sebastian Galiani, Ilan Noy and Juan Pantano

No 4671, Research Department Publications from Inter-American Development Bank, Research Department

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

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)
Date: 2010-06
New Economics Papers: this item is included in nep-dev, nep-ene and nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (58)

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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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