Working Papers

The Economics of Natural Disasters: A Survey

AUTHOR(s): Cavallo, Eduardo A. , Noy, Ilan
PUBLISHED: December 2009
RELATED TOPICS: Poverty Reduction and Labor


Natural disasters are by no means new, yet the evolving understanding of their relevance to economic development and growth is still in its infancy. This paper summarizes the state of the economic literature examining the aggregate impact of disasters. The paper reviews the main disaster data sources available, discusses the determinants of the direct effects of disasters, and distinguishes between short- and long-run indirect effects. The paper then examines some of the relevant policy questions and follows up with projections about the likelihood of future disasters. The paper ends by identifying several significant gaps in the literature.

Related Research by JEL Codes:
(or click here to find research by JEL Codes)
  • Ideas for Development in the Americas, Volume 22: The Economics of Natural Disasters
    Newsletter / Journal
    IDEA-22 - July 2010

    This issue of IDEA was inspired by the myriad questions raised by the successive natural disasters that have struck the developing world of late. It asks why some countries are more resilient to natural catastrophes than others and examines the short-term economic effects of disaster (the case of Haiti), the long-term effects on economic growth, and the policies countries might adopt to better ins ... (View publication)

  • Catastrophic Natural Disasters and Economic Growth
    Working Papers
    IDB-WP-183 - June 2010

    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 extremel ... (View publication)

  • Natural Disasters in Latin America and the Caribbean: An Overview of Risk
    Working Papers
    WP-434 - October 2000

    This paper integrates information from both economics and the physical sciences to survey the effects of natural disasters in the region. A first section surveys the human and economic impact of natural disasters in the region at both the household and aggregate levels, noting both the geographical distribution of disaster risk and its long-term implications for development. A second section revie ... (View publication)

Hello, Welcome to the IDB!

Please join our mailing list by simply entering your email below.