Natural Disasters and Growth: The Role of Foreign Aid and Disaster Insurance
Rodolfo Manuelli
No 1118, 2017 Meeting Papers from Society for Economic Dynamics
Abstract:
In this paper we develop a continuous time stochastic growth model that is suitable for studying the impact of natural disasters on the short run and long run growth rate of an economy. We find that the growth effects of a natural disaster depend in complicated ways on the details of expected foreign disaster aid and the existence of catastrophe insurance markets. We show that disaster aid can delay recovery. We also show that access to catastrophe insurance can reduce investment in prevention and mitigation activities.
Date: 2017
New Economics Papers: this item is included in nep-dge, nep-env and nep-ias
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed017:1118
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