The Relationship Between Natural Disasters, Real Economic Growth, and Public Debt: Cross-Country Empirical Evidence
DOI:
https://doi.org/10.5281/zenodo.21002593Parole chiave:
Government Gross Debt. Natural Disaster, Disaster Damage, Economic Growth, Two-Stage System GMM EstimatorAbstract
This study aims to examine the effects of natural disaster damage and real economic growth on the general government's gross debt using empirical evidence from 48 countries. The Two-Stage System Generalised Moments (GMM) method was applied for the period 1965–2024 using five-year data. The empirical findings show that an increase in real economic growth statistically significantly reduces the general government's gross debt level. In contrast, an increase in natural disaster damage statistically significantly increases the general government's gross debt level. It was found that the first lag of the general government’s gross debt had an increasing effect on the current debt level.
Riferimenti bibliografici
Acevedo, S. (2014). Debt, growth and natural disasters: A Caribbean trilogy (IMF Working Paper No. WP/14/125). International Monetary Fund. Available: https://www.imf.org/external/pubs/ft/wp/2014/wp14125.pdf?utm_source (Retrieved December 15, 2025)
Atsalakis, G. S., Bouri, E. & Pasiouras, F. (2021). Natural disasters and economic growth: A quantile on quantile approach. Annals of Operations, 306, 83–109. https://doi.org/10.1007/s10479-020-03535-6.
Barone, G. & Mocetti, S. (2014). Natural disasters, growth and institutions: A tale of two earthquakes. Journal of Urban Economics, 84: 52–66. https://doi.org/10.1016/j.jue.2014.09.002
Barro, R. J. (2006). Rare Disasters and Asset Markets in the Twentieth Century. Quarterly Journal of Economics, 121, August, 823-866. https://doi.org/10.1162/qjec.121.3.823.
Benali, N., Mbarek, M. B., & Feki, R. (2018). Natural disaster, government revenues and debt: Evidence from high- and middle-income countries. Journal of the Knowledge Economy. Available: https://www.researchgate.net/publication/270745247_Fiscal_Responses_after_ Catastrophes_and_the_Enabling_Role_of_Financial_Development#fullTextFileContent (Retrieved December 15, 2025)
Bernstein, R. S., Baxter, P. J., Falk, H., Ing, R., Foster, L. & Frost, F. (1980) et al. Immediate public health concerns and actions during volcanic eruptions: lessons from the Mount St. Helens eruptions, May 18–October 18, 1980. Am J Public Health 1986;76(3 Suppl):25–37. https://ajph.aphapublications.org/doi/pdf/10.2105/AJPH.76.Suppl.25.
Best, R. & Burke, P. J. (2019). Macroeconomic impacts of the 2010 earthquake in Haiti. Empir Econ, 56(5): 1647–1681. https://doi.org/10.1007/s00181-017-1405-4.
Brody, S. D., Zahran, S., Maghelal, P., Grover, H., & Highfield, W. E. (2007). The rising costs of floods: Examining the impact of planning and development decisions on property damage in Florida. Journal of the American Planning Association, 73(3), 330–345. https://doi.org/10.1080/01944360708977981.
Cang, D., Xu, Y.& Wang, G. (2022). The Relationship between Economic Growth and Disaster Losses-Based on Linear and Nonlinear ARDL Model in China. Sustainability, 14, 9760. https://doi.org/10.3390/su14159760.
Cavallo, E., Becerra, O. & Acevedo, L. (2021). The Impact of Natural Disasters on Economic Growth. IDB Working Paper Series; 1257, 1-55. http://doi.org/10.18235/0003683.
Cevik, S., & Nanda, V. (2020). Riding the storm: Fiscal sustainability in the Caribbean. International Review of Applied Economics, 34(3), 384–399. https://doi.org/10.1080/02692171.2020.1749241
Coffman, M. & Noy, I. (2011). Hurricane Iniki: measuring the long-term economic impact of a natural disaster using synthetic control. Environment and Development Economics, 17:187–205. https://doi.org/10.1017/S1355770X11000350.
Cuaresma, J. C. (2022). Natural disasters and economic growth: Revisiting the evidence. Chapters, in: Mark Skidmore (ed.), Handbook on the Economics of Disasters, chapter 8, pages 134-149, Edward Elgar Publishing. https://doi.org/10.4337/9781839103735.00016.
Davlasheridze, M. & Miao, Q. (2021). Natural disasters, public housing, and the role of disaster aid. Journal of Regional Science, 61(5), 1113-1135. https://doi.org/10.1111/jors.12534.
Davlasheridze, M., Fisher‐Vanden, K., & Allen Klaiber, H. (2017). The effects of adaptation measures on hurricane-induced property losses: Which FEMA investments have the highest returns? Journal of Environmental Economics and Management, 81, 93–114. https://doi.org/10.1016/j.jeem.2016.09.005.
Deryugina, T. (2022). Economic effects of natural disasters. IZA World of Labor Evidence-based policy making, 493, 1-10. doi: 10.15185/izawol.493.
Díaz, D., Paniagua, P. & Larroulet, C. (2024). Earthquakes and the wealth of nations: The cases of Chile and New Zealand. Papers 2405.12041, 1-33. https://doi.org/ 10.48550/arXiv.2405.12041.
Dolu, A., & İkizler, H. (2024). The Effect of Natural Disaster on Regional Economic Growth: Evidence from an Earthquake in İzmir/Türkiye. Industrial Policy, 4(2), 59-74. https://doi.org/10.61192/indpol.1575258.
duPont IV, W. & Noy, I. (2015). What happened to Kobe? A reassessment of the impact of the 1995 earthquake in Japan. Economic Development and Cultural Change, 63(4): 777–812. https://doi.org/10.1086/681129.
ECLAC (1991). Manual for Estimating the Socio-Economic Effects of Natural Disasters (Santiago, Chile, United Nations: ECLAC).
ECLAC and The World Bank (2003). Handbook for Estimating the Socio-Economic and Environmental Effects of Disasters (United Nations: ECLAC & The World Bank).
EM-DAT (2025a). The International Disaster Database. Centre for Research on the Epidemiology of Disaster. Access Data. https://public.emdat.be/data. (Retrieved December 15, 2025)
EM-DAT (2025b). The International Disaster Database. Centre for Research on the Epidemiology of Disaster. https://doc.emdat.be/docs/data-structure-and-content/disaster-classification-system/#a-brief-history-of-the-em-dat-classification-system. Accessed 26 March 2025.
Fan, R. Y., Lederman, D., Nguyen, H. T., & Rojas, C. (2021). Calamities, debt, and growth. World Bank (Draft). Available: https://thedocs.worldbank.org/en/doc/e05439c05e3e463eb0edbc9f21454354-0280032025/original/Calamities-Debt-and-Growth-clean.pdf(Retrieved December 15, 2025)
Farzanegan, M. R. & Fischer, S. (2025). The impact of a large-scale natural disaster on local economic activity: evidence from the 2003 Bam earthquake in Iran, Empirical Economics, 68:1409–1428. https://doi.org/10.1007/s00181-024-02676-y.
Festa, G. I., Guerriero, L., Focareta, M., Meoli, G., Revellino, S., Guadagno, F.M. & Revellino, P. (2022). Calculating Economic Flood Damage through Microscale Risk Maps and Data Generalization: A Pilot Study in Southern Italy. Sustainability, 14, 6286. https://doi.org/10.3390/su14106286.
Fisera, B. (2023). Natural disasters and debt financing costs. World Scientific Publishing. Available: https://www.worldscientific.com/doi/full/10.1142/S201000782350015X?srsltid=AfmBOoq7LDR0aeNUFmdVduqbI4ee2cE5hpiPiI4jX3dSuHbsJpIHMSa4&utm_source (Retrieved December 15, 2025)
Fomby, T., Ikeda, Y., & Loayza, N. V. (2013). The growth aftermath of natural disasters. Journal of Applied Econometrics, 28(3), 412–434. https://doi.org/10.1002/jae.1273
González, F. A. I.., London, S. & Santos, M. E. (2021). Disasters and economic growth: Evidence for Argentina, Climate and Development, 1310, 932-943. https://doi.org/10.1080/17565529.2021.1873724.
Graham, L. (2012). Razing lafitte: Defending public housing from a hostile state. Journal of the American Planning Association, 78 (4), 466–480. Scopus. https://doi.org/10.1080/01944363.2012.738143.
Graham, L. (2020). Public Housing Participation in Superstorm Sandy Recovery: Living in a Differentiated State in Rockaway, Queens. Urban Affairs Review, 56(1), 289–324. Scopus. https://doi.org/10.1177/1078087418776438.
Haklaj, A. (2023). Natural disaster risk reduction strategie (NDRRS 2023-2030). Tirana. https://www.undp.org/sites/g/files/zskgke326/files/2024-01/national_drr_strategy.pdf.
Hamideh, S. & Rongerude, J. (2018). Social vulnerability and participation in disaster recovery decisions: Public housing in Galveston after Hurricane Ike. Natural Hazards, 93(3), 1629–1648. Scopus. https://doi.org/10.1007/s11069-018-3371-3.
Hidalgo, J. & Baez, A. A. (2019). Natural disasters. Critical Care Clinics, 35(4), 591-607. https://doi.org/10.1016/j.ccc.2019.05.001.
Ibarrarán, M. E., Ruth, M., Ahmad, S. & London, M. (2009). Climate Change and Natural Disasters: Macroeconomic Performance and Distributional Impacts. Environment, Development and Sustainability, 11(3): 549-569. https://doi.org/10.1007/s10668-007-9129-9.
Khan, M. T.I., Anwar, S, Sarkodie, SA, Yaseen, MR, Nadeem, AM. (2023). Do natural disasters affect economic growth? The role of human capital, foreign direct investment, and infrastructure dynamics. Heliyon. 10; 9(1): e12911. https://doi.org/10.1016/ j.heliyon.2023.e12911.
Klomp, J. & Valckx, K. (2016). Economic Development and Natural Disasters: A satellite data analysis. Ecological Economics. https://doi.org/10.1016/j.gloenvcha.2014.02.006.
Koç, G., Natho, S. & Thieken, A. H. (2021). Estimating direct economic impacts of severe flood events in Turkey (2015–2020), International Journal of Disaster Risk Reduction, Volume 58, 102222, ISSN 2212-4209. https://doi.org/10.1016/j.ijdrr.2021.102222.
Koetsier, I. (2017). The fiscal impact of natural disasters (Discussion Paper No. 17-17). Utrecht University School of Economics. Available: https://www.uu.nl/sites/default/files/rebo_use_dp_2017_1717.pdf?utm_source (Retrieved December 15, 2025)
Kunawotor, M. E., Bokpin, G. A., Asuming, P. O., & Amoateng, K. A. (2022). The implications of climate change and extreme weather events for fiscal balance and fiscal policy in Africa. Journal of Social and Economic Development, 24, 470–492. https://doi.org/10.1007/s40847-022-00180-6
Leppold, C., Gibbs, L., Block, K., Reifels, L. & Quinn, P. (2022). Public health implications of multiple disaster exposures. Lancet Public Health, 7(3): e274-e286. https://doi.org/ 10.1016/S2468-2667(21)00255-3.
Liao, Y. & Junco, P. R. (2022). Extreme weather and the politics of climate change: A study of campaign finance and elections. Journal of Environmental Economics and Management, 111, 102550. https://doi.org/10.1016/j.jeem.2021.102550.
Lin, L.-Y., Wu, C. C., Liu, Y.-B., Ho, Y. L., Liau, C.-S. and Lee, Y.-T. (2001). Derangement of Heart Rate Variability During a Catastrophic Earthquake: A Possible Mechanism for Increased Heart Attacks. Pacing and Clinical Electrophysiology, 24: 1596-1601. https://doi.org/10.1046/j.1460-9592.2001.01596.x.
Lis, E. M., & Nickel, C. (2010). The impact of extreme weather events on budget balances. International Tax and Public Finance, 17, 378–399. https://doi.org/10.1007/s10797-010-9144-x.
Loayza, N. V., Olaberría, E., Rigolini, J., & Christiaensen, L. (2012). Natural Disasters and Growth: Going Beyond the Averages. World Development, 40(7), 1317–1336. https://doi.org/10.1016/j.worlddev.2012.03.002
Lugay, B., & James, R. (2010). The impact of natural disasters on public debt accumulation in selected ECCU countries. Internal publication. Available: https://cdn.centralbank.org.bb/documents/2022-02-04-09-07-12-The-Impact-of-Natural-Disasters-on-Public-Debt-Accumulation-in-Selected-ECCU-Countries.pdf?utm_source (Access Date: 15.12.2025)
Melecky, M., & Raddatz, C. (2011). How do governments respond after catastrophes? Natural-disaster shocks and the fiscal stance (World Bank Policy Research Working Paper No. 5564). World Bank. Available: https://ideas.repec.org/p/wbk/wbrwps/5564.html?utm_source (Retrieved December 15, 2025)
Merz B, Kreibich H, Schwarze R, and Thieken A. (2010). Assessment of economic Flood Damage. National Hazards Earth System Science, 10, 1697–1724. Copernicus Publications. European Geosciences Union. https://doi.org/10.5194/nhess-10-1697-2010.
Naoaj, M. S. (2023). From Catastrophe to Recovery:The Impact of Natural Disasters on Economic Growth in Developed and Developing Countries. European Journal of Development Studies, 3(2), 17–22. https://doi.org/10.24018/ejdevelop.2023.3.2.237.
NOAA National Centres for Environmental Information (NCEI) (2024). An active year of U.S. billion-dollar weather and climate disasters. https://www.climate.gov/news-features/blogs/beyond-data/2024-active-year-us-billion-dollar-weather-and-climate-disasters. (Retrieved April 17, 2025)
Noy, I. (2009). The macroeconomic consequences of disasters. Journal of Development Economics, 88, 221–231. https://doi.org/10.1016/j.jdeveco.2008.02.005.
Prihantini, C. I. (2020). Estimating the Economic Losses Value Caused by Flood Disaster in Sampang Regency Using Tangible Damage Assessment. IOP Conference Series: International Conference on Environment and Technology. Earth and Environmental Science. IOP Publishing, 469 012091. https://doi.org/10.1088/1755-1315/469/1/012091.
Prihantono, G. (2024). Estimation of River Flood Damages Among Farmers and Small Businesses in Developing Countries: Evidence from the Kali Lamong Indonesia. SEEJPH Volume XXV S1, 2024, ISSN: 2197-5248, 2718-2727. https://www.seejph.com/index.php/seejph/article/view/2518/1679.
Shawn, J. M., Ian, K. M. & Constant, T. (2024). Natural disasters, salience and public support for climate change policy. Empirical Economics, 67, 1691–1704. https://doi.org/10.1007/s00181-024-02601-3.
Shoaf K. I., Rottman S. J. (2000). Public health impact of disasters. Australian Journal of Emergency Management, 15: 58–63. https://www.austlii.edu.au/au/journals/AUJlEmMgmt/ 2000/41.pdf.
Skidmore, M., & Toya, H. (2002). Do natural disasters promote long-run growth? Economic Inquiry, 40(4), 664–687. https://doi.org/10.1093/ei/40.4.664
Tran, B. R. & Wilson, D. J. (2024). The Local Economic Impact of Natural Disasters. Federal Reserve Bank of San Francisco Working Paper, 2020-34. https://doi.org/10.24148/wp2020-34.
Van Aalst M. K. (2006). The impacts of climate change on the risk of natural disasters. Disasters, 30: 5–18. https://doi.org/10.1111/j.1467-9523.2006.00303.x.
Vasileiadou E. & Botzen W. J. W. (2014). Communicating adaptation with emotions: the role of intense experiences in raising concern about extreme weather. Ecology and Society, 19(2), 36. http://dx.doi.org/10.5751/ES-06474-190236.
Wijayanti, P., Zhu, X., Hellegers, P., Budiyono, Y. & van Ierland, E. C. (2017). Estimation of river flood damages in Jakarta, Indonesia. Nat Hazards, 86:1059–1079 http://dx.doi.org/10.1007/s11069-016-2730-1.
Yerdelen Tatoğlu, F. (2020). Ekonometri Stata Uygulamalı. İstanbul: Beta Yayınları.
Yerdelen Tatoğlu, F. (2023). İleri Panel Veri Analizi Stata Uygulamalı. İstanbul: Beta Yayınları.
##submission.downloads##
Pubblicato
Come citare
Fascicolo
Sezione
Licenza
Copyright (c) 2026 International Journal of Contemporary Economics and Administrative Sciences
TQuesto lavoro è fornito con la licenza Creative Commons Attribuzione 4.0 Internazionale.
The Author(s) must make formal transfer of copyright for each article prior to publication in the International Journal of Contemporary Economics and Administrative Sciences. Such transfer enables the Journal to defend itself against plagiarism and other forms of copyright infringement. Your cooperation is appreciated. You agree that copyright of your article to be published in the International Journal of Contemporary Economics and Administrative Sciences is hereby transferred, throughout the World and for the full term and all extensions and renewals thereof, to International Journal of Contemporary Economics and Administrative Sciences.
The Author(s) reserve(s): (a) the trademark rights and patent rights, if any, and (b) the right to use all or part of the information contained in this article in future, non-commercial works of the Author's own, or, if the article is a "work-for-hire" and made within the scope of the Author's employment, the employer may use all or part of the information contained in this article for intra-company use, provided the usual acknowledgements are given regarding copyright notice and reference to the original publication.
The Author(s) warrant(s) that the article is Author's original work, and has not been published before. If excerpts from copyrighted works are included, the Author will obtain written permission from the copyright owners and shall credit the sources in the article. The author also warrants that the article contains no libelous or unlawful statements, and does not infringe on the rights of others. If the article was prepared jointly with other Author(s), the Author agrees to inform the co-Author(s) of the terms of the copyright transfer and to sign on their behalf; or in the case of a "work-for-hire" the employer or an authorized representative of the employer.
The journal is registered with the ISSN : 1925-4423.
IJCEAS is licensed under a Creative Commons Attribution 4.0 International License.
This license lets others distribute, remix, tweak, and build upon your work, even commercially, as long as they credit you for the original creation. This is the most accommodating of licenses offered. Recommended for maximum dissemination and use of licensed materials.
