Loayza, NormanOlaberria, EduardoRigolini, JameleChristiaensen, Luc2012-03-192012-03-192009-06-01https://hdl.handle.net/10986/4172There has been a steady increase in the occurrence of natural disasters. Yet their effect on economic growth remains unclear, with some studies reporting negative, and others indicating no, or even positive effects. These seemingly contradictory findings can be reconciled by exploring the effects of natural disasters on growth separately by disaster and economic sector. This is consistent with the insights from traditional models of economic growth, where production depends on total factor productivity, the provision of intermediate outputs, and the capital-labor ratio, as well as the existence of important intersector linkages. Applying a dynamic Generalized Method of Moments panel estimator to a 1961-2005 cross-country panel, three major insights emerge. First, disasters affect economic growth - but not always negatively, and differently across disasters and economic sectors. Second, although moderate disasters can have a positive growth effect in some sectors, severe disasters do not. Third, growth in developing countries is more sensitive to natural disasters - more sectors are affected and the magnitudes are non-trivial.CC BY 3.0 IGOABUNDANCEAGGREGATE OUTPUTAGRICULTURAL GROWTHAGRICULTURAL PRODUCTIONAGRICULTURAL SECTORANNUAL GROWTHANNUAL GROWTH RATEBANKING CRISISBUSINESS CYCLESCAPITAL ACCUMULATIONCAPITAL INCREASESCASUALTIESCENTRE FOR RESEARCH ON THE EPIDEMIOLOGYCLIMATE CHANGECONSUMER PRICECONSUMER PRICE INDEXCOUNTRY CASECOUNTRY REGRESSIONSCOVARIANCE MATRIXCREDCROSS-COUNTRY ANALYSISDAMAGESDATABASE ON DISASTERSDEATH TOLLDECLARATIONDEPENDENT VARIABLEDESCRIPTIVE STATISTICSDEVELOPED COUNTRIESDEVELOPING COUNTRIESDEVELOPING WORLDDEVELOPMENT ECONOMICSDEVELOPMENT INDICATORSDEVELOPMENT RESEARCHDISASTERDISASTER ASSISTANCEDISASTER REDUCTIONDISASTER RISKDISASTER RISK REDUCTIONDISASTER TYPEDISASTER TYPESDISTRIBUTIONAL IMPACTDOMESTIC CREDITDROUGHTDROUGHTSDYNAMIC PANELEARTHQUAKEEARTHQUAKESECONOMIC ACTIVITIESECONOMIC ACTIVITYECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC IMPACTECONOMIC STUDIESECONOMICSECONOMICS LETTERSEMPIRICAL LITERATUREEMPIRICAL RESULTSEMPLOYMENT EQUATIONSERROR TERMESTIMATION METHODESTIMATION RESULTSEXPLANATORY VARIABLESEXTERNAL CONDITIONSEXTERNAL SHOCKSFAMINEFINANCIAL DEPTHFINANCIAL DEVELOPMENTFINANCIAL INSTITUTIONSFISCAL POLICYFIXED EFFECTSFLOODFLOODINGFLOODSGLOBAL CONDITIONSGOVERNMENT CONSUMPTIONGOVERNMENT SPENDINGGROSS DOMESTIC PRODUCTGROWTH DETERMINANTSGROWTH EFFECTGROWTH EFFECTSGROWTH MODELGROWTH PATTERNGROWTH PERFORMANCEGROWTH RATEGROWTH RATESGROWTH REGRESSIONGROWTH REGRESSION EQUATIONGROWTH REGRESSIONSHIGH INFLATIONHOUSEHOLD DATAIMPACT OF DISASTERSINCOMEINCREASE GROWTHINCREASES GROWTHINDUSTRIAL SECTORINFLATION RATEINFRASTRUCTURE DAMAGEINFRASTRUCTURE PROVISIONINSTRUMENTAL-VARIABLEINSURANCEINSURANCE COMPANIESINTERACTION TERMINTERACTION TERMSINTERNATIONAL MONETARY FUNDINTERNATIONAL TRADELAGGED DEPENDENTLAGGED LEVELSLAGGED VALUESLEVEL OF OUTPUT PER CAPITALONG RUNLONG-RUN GROWTHMACROECONOMIC FLUCTUATIONSMACROECONOMIC POLICIESMACROECONOMIC STABILIZATIONMACROECONOMIC VOLATILITYMARGINAL PRODUCTMARGINAL RETURNSMONETARY ECONOMICSNATURAL DISASTERNATURAL DISASTERSNATURAL HAZARDSNEGATIVE EFFECTNEGATIVE IMPACTNEGATIVE SIGN0 HYPOTHESISOUTPUT GROWTHPER CAPITA GROWTHPOINT ESTIMATESPOLICY RESEARCHPOVERTY REDUCINGPOVERTY REDUCTIONPRIVATE DOMESTICPRIVATE DOMESTIC CREDITPUBLIC INFRASTRUCTURERECONSTRUCTIONREGRESSION MODELRELATIVE IMPORTANCERELIEFRELIEF ACTIVITIESREVERSE CAUSATIONREVIEW OF ECONOMICSRICH ECONOMIESSAVING RATESAVINGSSERIAL CORRELATIONSHARP REDUCTIONSIGNIFICANT EFFECTSOCIAL PROTECTIONSTABILIZATION POLICIESSTANDARD GROWTH DETERMINANTSSTORMSTORMSTRADE OPENNESSTRADE SHOCKSTRANSITIONAL CONVERGENCETYPE OF DISASTERUNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENTWorld Bankhttps://doi.org/10.1596/1813-9450-4980