Is growth at risk from natural disasters ? Evidence from quantile local projections

Nabil Daher

No 2025-9, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: This paper investigates the nonlinear impact of natural disasters on economic growth. Using the Quantile Local Projections (QLP) method on a panel of 68 developing countries over the period 1970-2021, we find that natural disasters have an overall nonlinear effect across economic states. In particular, while some disasters exacerbate economic downturns in low-income countries, high-income developing ones tend to exhibit more resilience to adverse impacts. We argue that the state-dependent effects of natural disasters may be influenced by business cycle phases and structural economic weaknesses, such as sectoral interdependencies and limited economic diversification, especially in low-income countries.

Keywords: Natural Disasters; Quantile Local Projections; Developing Economics (search for similar items in EconPapers)
JEL-codes: C23 E32 O11 O57 Q54 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2025
New Economics Papers: this item is included in nep-dev and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2025-9

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