Coping with Disaster: The Impact of Hurricanes on International Financial Flows, 1970-2002Dean Yang
The B.E. Journal of Economic Analysis & Policy, 2008, vol. 8, issue 1 Abstract: How well do countries cope with the aftermath of natural disasters? Do international financial flows buffer countries in the wake of disasters? This paper examines the impact of hurricanes on resource flows to developing countries. Using meteorological data, I construct a time-varying storm index taking into account the fraction of a country's population exposed to storms of varying intensities. Overall, hurricanes lead to large increases in foreign aid. For other types of international financial flows, the impact of hurricanes varies according to income level. For poorer countries, hurricanes lead to increases in migrants' remittances, so that total inflows from all sources in the three years following hurricane exposure amount to roughly four-fifths of estimated damages. For richer countries, by contrast, hurricanes stimulate inflows of new lending from multilateral institutions, but offsetting declines in private financial flows are so large that the null hypothesis of zero damage replacement cannot be rejected. Keywords: risk-sharing; insurance; official development assistance; foreign aid; remittances; foreign direct investment; international lending; natural disasters; hurricanes (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:bpj:bejeap:v:8:y:2008:i:1:n:13 Access Statistics for this article More articles in The B.E. Journal of Economic Analysis & Policy from Berkeley Electronic Press |
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