Coping with Disaster: The Impact of Hurricanes on International Financial Flows, 1970-2002 / Dean Yang.

Format:

Book

Author/Creator:

Yang, Dean.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w12794.

NBER working paper series no. w12794

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Coping with Disaster

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2006.

Summary:

How well do countries cope with the aftermath of natural disasters? In particular, do international financial flows help buffer countries in the wake of disasters? This paper focuses on hurricanes (one of the most common and destructive types of disasters), and examines the impact of hurricane exposure on resource flows to developing countries. Using meteorological data on storm paths, I construct a time-varying storm index that takes into account the fraction of a country's population exposed to storms of varying intensities. Across developing countries, greater hurricane exposure leads to large increases in foreign aid. For other types of international financial flows, the impact of hurricanes varies according to income level. In the poorer half of the sample, hurricane exposure leads to substantial increases in migrants' remittances, so that total inflows from all sources in the three years following hurricane exposure amount to roughly three-fourths of estimated damages. In the richer half of the sample, by contrast, hurricane exposure stimulates inflows of new lending from multilateral institutions, but offsetting declines in private financial flows are so large that the null hypothesis of zero damage replacement cannot be rejected.

Notes:

Print version record

December 2006.