Quantifying the Demand, Supply, and Welfare Effects of Natural Disasters Using Monthly Trade Data

45 Pages Posted: 28 Dec 2020

See all articles by Gabriel J. Felbermayr

Gabriel J. Felbermayr

Kiel Institute for the World Economy

Jasmin Gröschl

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Benedikt Heid

University of Adelaide

Date Written: 2020

Abstract

We develop a simple methodology to estimate monthly aggregate supply and demand conditions from bilateral international trade data for about 180 countries and 40 years. We apply our method to measure the short-run effects of natural disasters. In line with theoretical considerations, we find large, persistent negative effects of earthquakes and storms on supply and demand for credit-constrained countries. In other economies, supply is temporarily depressed while demand is temporarily up after a disaster. Using a consistent structural trade model, we back out monthly aggregate productivity measures. We quantify how the adverse productivity effects of the 1992 earthquake in Nicaragua and the 2011 Tohoku earthquake in Japan impacted those countries and their trade partners conditional on different assumptions about trade costs.

JEL Classification: F140, F180, Q540, C680

Suggested Citation

Felbermayr, Gabriel J. and Groeschl, Jasmin and Heid, Benedikt, Quantifying the Demand, Supply, and Welfare Effects of Natural Disasters Using Monthly Trade Data (2020). CESifo Working Paper No. 8798, Available at SSRN: https://ssrn.com/abstract=3754689 or http://dx.doi.org/10.2139/ssrn.3754689

Gabriel J. Felbermayr (Contact Author)

Kiel Institute for the World Economy ( email )

P.O. Box 4309
Kiel, Schleswig-Hosltein D-24100
Germany

Jasmin Groeschl

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

Benedikt Heid

University of Adelaide ( email )

No 233 North Terrace, School of Commerce
Adelaide, South Australia 5005
Australia

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
83
Abstract Views
422
Rank
550,292
PlumX Metrics