Shaken, Not Stirred: the Impact of Disasters on International Trade

KOF Working Papers / KOF Swiss Economic Institute, ETH Zurich No. 139

40 Pages Posted: 2 Jul 2006

See all articles by Martin Gassebner

Martin Gassebner

ETH Zurich - KOF Swiss Economic Institute; CESifo (Center for Economic Studies and Ifo Institute)

Alexander Keck

World Trade Organization (WTO)

Robert Teh

World Trade Organization (WTO)

Multiple version iconThere are 2 versions of this paper

Date Written: June 2006

Abstract

This paper examines the impact of major disasters on trade flows using a gravity model (170 countries, 1962-2004). As a conservative estimate, an additional disaster reduces imports on average by 0.2% and exports by 0.1%. Despite this apparent persistence of bilateral trade volumes, the impact of catastrophes depends on the democracy level and size of the affected country. In autocracies, exports and imports are significantly reduced: Had Togo been struck by a major disaster in 2000, it would have lost 6.8% of its imports and 8.2% of its exports. Democratic countries' exports suffer modest decreases, while imports are hardly affected.

Keywords: International trade, disasters, gravity model, governance

JEL Classification: F14, P52, P48, C23

Suggested Citation

Gassebner, Martin and Keck, Alexander and Teh, Robert, Shaken, Not Stirred: the Impact of Disasters on International Trade (June 2006). KOF Working Papers / KOF Swiss Economic Institute, ETH Zurich No. 139. Available at SSRN: https://ssrn.com/abstract=912210 or http://dx.doi.org/10.2139/ssrn.912210

Martin Gassebner (Contact Author)

ETH Zurich - KOF Swiss Economic Institute ( email )

Weinbergstrasse 35
Zurich, 8092
Switzerland

HOME PAGE: http://www.kof.ethz.ch/chair/

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

Poschinger Str. 5
Munich, DE-81679
Germany

Alexander Keck

World Trade Organization (WTO) ( email )

154 Rue de Lausanne
CH-1211 Geneva 21
Switzerland

Robert Teh

World Trade Organization (WTO) ( email )

154 Rue de Lausanne
CH-1211 Geneva 21
Switzerland

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