Research Seminar

Quantifying the Short-Run Productivity and Expenditure Effects of Natural Disasters — Gabriel Felbermayr

29 Oct 2019

Institut für Weltwirtschaft


Gabriel Felbermayr (Kiel Institute)


We estimate the short-run effects of natural disasters on international trade using a panel of monthly trade data and information on the physical intensity of two major types of short-lived disasters: Earthquakes and storms. Results show a strong heterogeneity across disaster types and country groups. While least developed and indebted poor countries see their trade reduced, we find small effects for developed countries. To trace heterogeneous trade effects, we investigate particularly devastating disaster events both in developed and developing economies. We then use these estimates to inform a dynamic quantitative trade model. We disentangle the monthly effects of recent natural disasters on a country’s productivity and expenditure. We also quantify the importance of trade costs and country size in determining the size of international spillover effects of natural disasters. Result show that spillovers are short-lived and negligible if the country affected by an event is small, but sizable for large economies. As a byproduct of our methodology, we provide measures of monthly country-specific economic activity.


Gabriel Felbermayr (Kiel Institute) – Jasmin Gröschl (ifo Institute) – Benedikt Heid (ifo Institute)


Lecture Hall (A-032)