Catastrophic Natural Disasters and Economic Growth

Eduardo Cavallo, Ilan Noy, Juan Pantano and Sebastian Galiani

No 1903, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: This paper examines the short and long-run average causal impact of catastrophic natural disasters on economic growth by combining information from comparative case studies. The counterfactual of the cases studied is assessed by constructing synthetic control groups, taking advantage of the fact that the timing of large sudden natural disasters is an exogenous event. It is found that only extremely large disasters have a negative effect on output, both in the short and long run. However, this result appears in two events where radical political revolutions followed the natural disasters. Once these political changes are controlled for, even extremely large disasters do not display any significant effect on economic growth. It is also found that smaller, but still very large natural disasters, have no discernible effect on output.

Keywords: IDB-WP-183 (search for similar items in EconPapers)
JEL-codes: O40 O47 (search for similar items in EconPapers)
Date: 2010-06
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Citations: View citations in EconPapers (16)

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Related works:
Journal Article: Catastrophic Natural Disasters and Economic Growth (2013)
Working Paper: Catastrophic Natural Disasters and Economic Growth (2010)
Working Paper: Catastrophic Natural Disasters and Economic Growth (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:1903

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