Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/283360 
Year of Publication: 
2023
Series/Report no.: 
Economics Working Paper Series No. 23/382
Publisher: 
ETH Zurich, CER-ETH - Center of Economic Research, Zurich
Abstract: 
We present a new framework for estimating the long-run economic impacts of natural disasters. Our approach combines a disaster impact model with a general equilibrium model of the economy. We apply the methodology to study the effects of tropical cyclones in the United States, the Caribbean islands, Japan, China, and the Philippines. Our results show that the post-disaster recovery after a single shock can take several decades, with notable cumulative negative effects for frequently affected regions. For instance, cyclone activity reduces long-run aggregate consumption between 0.3 - 22 %, depending on the region. To evaluate the robustness of our results, we extend the model with two additional scenarios. First, we consider endogenous economic productivity gains from specialization. Second, we add a scenario where climate change alters the intensity and frequency of future disasters. The extensions slightly modify the numerical results but do not change the qualitative conclusions.
Subjects: 
Tropical Cyclones
Climate Change
Growth
General Equilibrium
JEL: 
C63
O11
Q54
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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