Abstract
This study examined the causal relationship between natural disasters and economic growth. We set up an econometric model to analyze cross-country and sector-based macroeconomic data jointly with several indices of natural disasters. We found that i) natural disasters may affect GDP growth positively but not statically significant; ii) for the growth of each economic sector the effect of natural disaster would be different. Furthermore, we found that major estimation results would be consistent with the hypothesis called “Productivity Effect of Natural Disasters” proposed by past theoretical studies.
