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- Permanent Link:
- http://dpanther.fiu.edu/dpService/dpPurlService/purl/FI13010902/00001
Notes
- Summary:
- The primary objective of this research paper is to empirically examine the short and long run impact of catastrophic natural disasters on economic growth by utilizing a comparative case studies methodology. While preliminary evidence points towards the likelihood that large natural disasters may negatively impact economic growth in their immediate aftermath, much of the research on this subject remains rather inconclusive. This is even truer to studies of their impact on long-term growth. The authors utilize comparative case analysis to determine what would have happened to the gross domestic product (GDP) of the affected country if a natural disaster had not occurred. Their comparative analysis begins with the establishment of a control group made up of countries that share many characteristics with the affected country but have not faced major disaster. After establishing the control group, the researchers compare the evolution of their GDP growth to that of the affected country following the disaster, taking note of differences both after the disaster and over an extended period of time. They used the World Bank World Development Indicators (WDI) for information on GDP per capita, and the EM-DAT database to determine the impact of natural disasters on the countries in their study. The authors found that only catastrophic disasters display an impact on GDP growth, both in the short and long run. Ten years after these disasters, the average GDP per capita of the countries affected was ten percent below what it had been when the disaster occurred, while in the control group countries that did not experience a catastrophic event, GDP per capita was nearly 18 percent higher. Despite what seem like conclusive evidence, these findings are somewhat muddled. Two of the four major disasters studies were followed by radical political revolutions: the Islamic Revolution in Iran and the Sandinista Revolution in Nicaragua, both in 1979 not long after massive earthquakes. The authors argue that while it is plausible that the level of disaster caused by these earthquakes may have lead to these radical revolutions, they could not verify such a claim empirically. For the other two large disaster events not followed by radical political change, hurricanes in Honduras in 1974 and the Dominican Republic in 1979, little significant effects on economic growth were witnessed. For less severe disaster events, there is no evidence of impact on GDP growth either in the short or long term. ( English,,English,,,, )
- Subject:
- Economy and Disasters
- Scope and Content:
- 1. Introduction p. 2; 2. Empirical methodology p. 4; 2.1 Estimating the impact of large disasters with comparative case studies p. 5; 2.2 Computational issues p. 8; 2.3 Statistical significance of estimated effects p. 9; 3. Data description p. 11; 3.1 Data sources p. 11; 3.2 Defining large disasters p. 13; 4. Results p. 17; 4.1 Overall effects p. 17; 4.2 Effects controlling for radical political revolutions p. 22; 5. Conclusions p. 24; References p. 25; Appendix Table 1. Events included in each percentile-based definition of large event p. 27
- Citation/Reference:
- Cavallo, E., Galiani, S., Noy, I., & Pantano, J. (2010). Catastrophic natural disasters and economic growth. Intern-American Development Bank (IDB).
Record Information
- Source Institution:
- Florida International University
- Rights Management:
- This paper may be freely reproduced provided credit is given to the Inter-American Development Bank.
- Resource Identifier:
- FI13010902
643125528 ( oclc )
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