Browsing by Subject "Natural disasters -- Economic aspects"
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- ItemFinancial Contagion: The Impact of Global Disasters(2011) Fong, Jory; Mudd, ShannonMost available literature on the contagion effects of crises focuses primarily on currency crises and does not address the plethora of natural disasters that have occurred recently. This thesis seeks to compare the effects of natural and non-natural disasters as a source of contagion due to fundamentals vs. changes perceptions. Events are divided into two main categories: crises that are expected to remain isolated, and events that are expected to yield spillover effects. Because there is no reason for a natural disaster to affect perceptions of the health of a neighboring country’s economy, financial sector, etc., any contagion effects should be purely due to fundamental links between the two economies. For this reason, non-natural disasters, because of the potential for changes in perceptions are predicted to be a stronger source for financial contagion than natural disasters. Results from an event study examining government bond spreads indicate that contrary to opinion, natural disasters yielded more instances of spillover effects for longer periods of time.
- ItemMacroeconomic Cost Estimation of Natural Disaster(2020) Wang, Claire Chenyu; Ross, David R.As natural disasters have been occurring more frequently than ever before, determining its economic impact is crucial for different parties for asset and live loss compensation, reconstruction, and international aid. However, literature disagrees largely on its direction, magnitude, and duration. One critical reason of this disagreement is the method of estimating the counterfactual growth of the affected economy. This study uses a synthetic cohort of countries to predict the counterfactual growth for five case studies of extremely large disasters. We find that all five cases experienced no immediate short-run loss. For the medium-and long-run, one case (2003 Luxembourg extreme heatwave) has experienced permanent loss of growth; one case (2005 Pakistan earthquake) experiences medium-run economic boom but not in the long-run; and two other cases (2004 Indonesia earthquake and tsunami and 2003 Spain heatwave) have permanent economic gain; one case (2003 Sri Lanka earthquake) experience no significant effect. The results suggest that the initial phase of economic development and the type of a disaster have no unifying effect on the impact of the disasters. Instead, pre-disaster idle production capacity and the composition of aids might have effects on the impact.