Catastrophic Natural Disasters and Economic Growth

Eduardo Cavallo, Sebastian Galiani, Ilan Noy and Juan Pantano
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Juan Pantano: Washington University in St. Louis

The Review of Economics and Statistics, 2013, vol. 95, issue 5, 1549-1561

Abstract: We examine the average causal impact of catastrophic natural disasters on economic growth by combining information from comparative case studies. For each country affected by a large disaster, we compute the counterfactual by constructing synthetic controls. We find that only extremely large disasters have a negative effect on output in both the short and the long runs. However, we also show that this results from two events where radical political revolutions followed the disasters. Once we control for these political changes, even extremely large disasters do not display any significant effect on economic growth. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Keywords: natural disasters; political change; economic growth and causal effects (search for similar items in EconPapers)
JEL-codes: O40 O47 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (620)

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Related works:
Working Paper: Catastrophic Natural Disasters and Economic Growth (2010)
Working Paper: Catastrophic Natural Disasters and Economic Growth (2010)
Working Paper: Catastrophic Natural Disasters and Economic Growth (2010)
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