Debt, Growth and Natural Disasters A Caribbean Trilogy

 
Author/Editor: Sebastian Acevedo Mejia
 
Publication Date: July 16, 2014
 
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: This paper seeks to determine the effects that natural disasters have on per capita GDP and on the debt to GDP ratio in the Caribbean. Two types of natural disasters are studied –storms and floods– given their prevalence in the region, while considering the effects of both moderate and severe disasters. I use a vector autoregressive model with exogenous natural disasters shocks, in a panel of 12 Caribbean countries over a period of 40 years. The results show that both storms and floods have a negative effect on growth, and that debt increases with floods but not with storms. However, in a subsample I find that storms significantly increase debt in the short and long run. I also find weak evidence that debt relief contributes to ease the negative effects of storms on debt.
 
Series: Working Paper No. 14/125
Subject(s): Debt and growth | Caribbean | Gross domestic product | Public debt | Official development assistance | Debt relief | Econometric models

 
English
Publication Date: July 16, 2014
ISBN/ISSN: 9781498337601/1018-5941 Format: Paper
Stock No: WPIEA2014125 Pages: 47
Price:
US$18.00 (Academic Rate:
US$18.00 )
 
 
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