Short-, Medium-, and Long-Term Growth Impacts of Catastrophic and Non-catastrophic Natural Disasters
- PDF / 550,489 Bytes
- 18 Pages / 439.37 x 666.142 pts Page_size
- 100 Downloads / 203 Views
Short-, Medium-, and Long-Term Growth Impacts of Catastrophic and Non-catastrophic Natural Disasters Hiroki Onuma 1
2
& Kong Joo Shin & Shunsuke Managi
2
Received: 24 October 2019 / Accepted: 17 August 2020/ # Springer Nature Switzerland AG 2020
Abstract
Using disaster data from 1960, this paper examines the effects of natural disasters on economic growth. The analysis considers disaster effects by combining the following four dimensions: 1) short-, medium-, and long-term impacts, 2) disaster severity, categorized as catastrophic (CAT) or non-catastrophic (NCAT), 3) disaster type: hydro-meteorological, geophysical, and other specific disaster types, and 4) four income groups. The results show that the impacts of a disaster event on economic growth vary depending on the time frame, severity, disaster type, and income level. Overall, CAT disasters have negative impacts regardless of the time frame, while NCAT disasters may have positive impacts depending on the disaster type. The results also indicate that economic growth in lowermiddle-income countries is most sensitive to natural disasters, but developed countries also experience negative impacts from CAT disasters. Keywords Natural disaster . Catastrophic disaster . Hydro-meteorological disaster . Geophysical disaster . Economic growth . Income level JEL Classification O1 . Q54
Introduction Understanding the economic impacts of natural disasters plays an important role in the effective mitigation of disaster damage, which is one of the key challenges facing nations that are aiming to achieve sustainable growth (UNISDR 2015). While substantial attention is given to the immediate losses incurred by natural disasters, previous studies suggest that the economic impacts of natural disasters are not necessarily uniformly negative.
* Hiroki Onuma onuma–[email protected]
1
Research Institute of Economy, Trade and Industry, Tokyo, Japan
2
Urban Institute & Department of Civil Engineering, Kyushu University, Fukuoka, Japan
Economics of Disasters and Climate Change
Traditional neoclassical growth models predict that the destruction of capital leads to a temporary decline in a country’s economy, and then, the affected economy returns to a balanced growth path over time (Akao and Managi 2007). On the other hand, endogenous growth models suggest that the impacts of natural disasters depend on their relative effects on capital and labor ratios; a disaster event can cause losses of physical and human capital, but it can also increase physical capital per unit of labor (Cavallo et al. 2013). Chhibber and Laajaj (2008) suggested there are short-term negative impacts and a possible disappearance of negative impacts over the long term. The authors provided the following possible scenarios of long-term impacts from a disaster on economic growth that include growth components: (i) no impact on the long-term growth path1; (ii) a negative impact through a permanent reduction in capital stock, and (iii) a positive impact by enhancing technological changes during the recove
Data Loading...
