Natural Disaster, Government Revenues and Expenditures: Evidence from High and Middle-Income Countries

Nadia Benali (), Mounir Ben Mbarek () and Rochdi Feki ()
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Nadia Benali: University of Sfax
Mounir Ben Mbarek: University of Sfax
Rochdi Feki: Business School of Sfax

Journal of the Knowledge Economy, 2019, vol. 10, issue 2, No 11, 695-710

Abstract: Abstract This paper examines the dynamic links between government budgets (government expenditures and revenues), natural disaster, and three key macroeconomic indicators; economic growth, inflation rate, and government debt. By studying the annual data for high- and middle-income countries over 1990–2013 and employing a panel vector autoregressive model for detecting Granger causality, we find that there is a big correlation between these variables, including unidirectional causality between natural disasters and government debt. For middle-income countries there is a unidirectional causality from natural disasters to government expenditures. Thus, there is a unidirectional causality between natural disasters and economic growth and government revenues for high- and middle-income countries.

Keywords: Government expenditures; Government revenues; Natural disasters; Economic growth; Panel VAR; Panel unit roots; Granger causality (search for similar items in EconPapers)
JEL-codes: C33 H61 O44 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s13132-017-0484-y

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