TY  - JOUR
AU  - Yang,Dean
TI  - Coping with Disaster: The Impact of Hurricanes on International Financial Flows, 1970-2002
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12794
PY  - 2006
Y2  - December 2006
UR  - http://www.nber.org/papers/w12794
L1  - http://www.nber.org/papers/w12794.pdf
N1  - Author contact info:
Dean Yang
University of Michigan
Gerald R. Ford School of Public Policy
and Department of Economics
735 S. State Street, Room 3316
Ann Arbor, MI 48109
Tel: 734/764-6158
Fax: 734/763-9181
E-Mail: deanyang@umich.edu
AB  - How well do countries cope with the aftermath of natural disasters? In particular, do international financial flows help buffer countries in the wake of disasters? This paper focuses on hurricanes (one of the most common and destructive types of disasters), and examines the impact of hurricane exposure on resource flows to developing countries. Using meteorological data on storm paths, I construct a time-varying storm index that takes into account the fraction of a country's population exposed to storms of varying intensities. Across developing countries, greater hurricane exposure leads to large increases in foreign aid. For other types of international financial flows, the impact of hurricanes varies according to income level. In the poorer half of the sample, hurricane exposure leads to substantial increases in migrants' remittances, so that total inflows from all sources in the three years following hurricane exposure amount to roughly three-fourths of estimated damages. In the richer half of the sample, by contrast, hurricane exposure stimulates inflows of new lending from multilateral institutions, but offsetting declines in private financial flows are so large that the null hypothesis of zero damage replacement cannot be rejected.
ER  -