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

Author

Listed:
  • Ilan Noy

    (Department of Economics, University of Hawaii at Manoa)

  • Tam Bang Vu

    (College of Business and Economics, University of Hawaii at Hilo)

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.

Suggested Citation

  • Ilan Noy & Tam Bang Vu, 2009. "The Economics of Natural Disasters in a Developing Country: The Case of Vietnam," Working Papers 200903, University of Hawaii at Manoa, Department of Economics.
    • Handle: RePEc:hai:wpaper:200903
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    References listed on IDEAS

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    More about this item

    Keywords

    Vietnam; natural disasters; growth; exogenous shocks;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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