Long-term impacts of tropical cyclones and fluvial floods on economic growth – Empirical evidence on transmission channels at different levels of development

H. Krichene, T. Geiger, K. Frieler, S.N. Willner, I. Sauer and C. Otto

World Development, 2021, vol. 144, issue C

Abstract: While the short-term economic impacts of extreme weather events are well documented, little is known about their impacts and transmission channels on economic growth in the long run. Using panel data regressions and national shares of people exposed to tropical cyclones and fluvial floods as exogenous predictors, we find output growth losses from severe tropical cyclones and fluvial floods to accumulate to −6.5% and −5.0% over 15 years, respectively. We further observe a strongly non-linear increase of these losses with disaster intensity. To understand how the observed impacts depend on the countries’ development level, we implement a country-specific regression framework. While we find evidence that higher development can prevent economic growth losses from fluvial floods, this is not the case for tropical cyclones. Further, we systematically study the economic and non-economic transmission channels through which these events impact on economic growth in the long run. We find that rising household consumption and government expenditure are the main growth-loss mitigating channels, whereas rising investment is the main growth-loss amplifying channel in the period 1971–2010.

Keywords: Tropical cyclones; Fluvial floods; Economic growth losses; Level of development; Transmission channels (search for similar items in EconPapers)
JEL-codes: C50 F63 O44 Q54 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:144:y:2021:i:c:s0305750x21000875

DOI: 10.1016/j.worlddev.2021.105475

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