Catastrophic Natural Disasters and Economic Growth

Eduardo A. Cavallo; Sebastian Galiani; Ilan Noy; Juan Pantano

doi:10.1162/rest_a_00413

Catastrophic Natural Disasters and Economic Growth

Eduardo A. Cavallo¹; Sebastian Galiani²; Ilan Noy³; Juan Pantano⁴

¹ Inter-American Development Bank · ² University of Maryland · ³ University of Hawaii and Victoria University of Wellington · ⁴ Washington University in St. Louis

The Review of Economics and Statistics 2013

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.

DOI: 10.1162/rest_a_00413
Volume: 95 (5)
Pages: 1549-1561
Language: en
Export: BibTeX
Sources: openalex crossref