The Economics of Natural Disasters in a Developing Country: The Case of Vietnam

Ilan Noy and Tam Vu ()
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Tam Vu: College of Business and Economics, University of Hawaii at Hilo

No 200903, Working Papers from University of Hawaii at Manoa, Department of Economics

Abstract: We examine impact of natural disasters on annual output and output growth in Vietnam. Using provincial data for primary and secondary industries in Vietnam, we employ the Blundell-Bond System GMM procedure to estimate the impact of disasters on the macro-economy. Results show that more lethal disasters result in lower output growth but that more costly disasters (in terms of destroyed capital) actually appear to boost the economy in the short-run. This result is consistent with the ‘creative destruction’ hypothesis that we outline. However we find that disasters have different macroeconomic impact in different geographical regions; and these differences are potentially related to the ability to generate transfers from the central government.

Keywords: Vietnam; natural disasters; growth; exogenous shocks (search for similar items in EconPapers)
JEL-codes: O40 Q54 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2009-05-01
New Economics Papers: this item is included in nep-dev
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Citations: View citations in EconPapers (5)

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http://www.economics.hawaii.edu/research/workingpapers/WP_09-3.pdf First version, 2009 (application/pdf)

Related works:
Journal Article: The economics of natural disasters in a developing country: The case of Vietnam (2010)
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