This paper investigates the nonlinear impact of natural disasters on economic growth. Using the Quantile Local Projections (QLP) method on a panel of 68 developing countries over the period 1970-2021, we find that natural disasters have an overall nonlinear effect across economic states. In particular, while some disasters exacerbate economic downturns in low-income countries, high-income developing ones tend to exhibit more resilience to adverse impacts. We argue that the state-dependent effects of natural disasters may be influenced by business cycle phases and structural economic weaknesses, such as sectoral interdependencies and limited economic diversification, especially in low-income countries.
Mot(s) clé(s)
Natural Disasters, Quantile Local Projections, Developing Economics
Please wait ...
