Impact of hurricanes strikes on international reserves in the Caribbean

Strobl, Eric; Ouattara, Bazoumana; Kablan, Sandrine

doi:10.1080/00036846.2020.1731411

Cited by 10 publications

(12 citation statements)

References 33 publications

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“…The results are comparable to the baseline estimates, shown in Appendix Tables 5 and 6. Further, we also use real reserves in logged terms as the dependent variable, following the approach of Strobl et al (2020). The main findings remain intact for the whole sample and across sub-samples.…”

Section: Additional Robustness Checksmentioning

confidence: 99%

“…Among very few studies, Klomp (2020) estimated a dynamic panel of 85 countries from 1960 and 2015, finding that, on average, the short-run policy interest rate falls in the first year after the earthquake to favour short-run economic recovery over price stability. Most relevant to our study is Strobl et al (2020) on the evaluation of the impact of hurricanes on international reserves in the Caribbean. Their evidence suggests that an increase in foreign reserves a month after the hurricane strike was followed by a decrease two months later.…”

Section: Introductionmentioning

confidence: 99%

“…More recent evidence related to disasters is Strobl et al (2020) based on a panel VAR with highfrequency (monthly) data on reserves and information on when a Caribbean island hit by a hurricane.…”

Section: Introductionmentioning

confidence: 99%

“…We contribute to the literature by analysing the response of reserve holdings to disaster shocks, controlling for country fundamentals, including the levels of trade and financial openness, the nature of their exchange rate or monetary regimes, and whether they are targeting inflation. Similar to Strobl et al (2020), we use a quasi-experimental setup in which the timing and Richter-scale intensity of earthquakes are taken as measures of exogenous shocks impacting the economy. We use earthquakes as our indicator for disasters because the earthquake occurrence has a spatial distribution that is wider than hurricanes or droughts.…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

How Shocks Affect International Reserves? A Quasi-Experiment of Earthquakes

Jinjarak¹,

Ta²

2020

SSRN Journal

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Section: Additional Robustness Checksmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

How Shocks Affect International Reserves? A Quasi-Experiment of Earthquakes

Jinjarak¹,

Ta²

2020

SSRN Journal

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“…A very limited number of empirical works, however, have addressed questions of monetary policy responses when such catastrophic events happen. Most relevant to our study is Strobl et al (2020) on the evaluation of the shortterm impact of hurricanes on international reserves in the Caribbean. Given the relatively homogenous composition of their sample, they are only able to differentiate between high-income Caribbean Island countries (who mostly rely on income from services, especially financial services) and middle-income ones who rely more on tourism and agriculture).…”

Section: Introductionmentioning

confidence: 99%

Essays on Economic Impacts of Disasters: The Aggregate and Disaggregate Evidence

Ta¹

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<p>This thesis is the product of three academic essays, of which each one attempts to answer a few questions related to the economics of disasters using both aggregate and disaggregate data. In the first essay, I examine the response of international reserves to external shocks by using a quasi-experiment of earthquakes on a panel of 103 countries. The results show that in the five years following a quake: (i) Countries exposed to it accumulate reserves ex-post for precautionary reasons, supported by the inflow of foreign assistance; (ii) Quake-prone countries tend to hold fewer reserves relative to the non-prone countries, suggested by the richer set of other disaster preventive measures in place for the former; (iii) The patterns of reserves holding post-earthquake vary with a country’s income level and other macroeconomic fundamentals. The second essay uses disaggregated microdata of New Zealand firms from 2001 to 2019 to quantify the short-to-medium impacts of the 2010/2011 Canterbury earthquakes on businesses. The findings show that the average annual investment of Canterbury firms over the period 2011-2019 is 2.2% higher than elsewhere. In terms of persistence, the immediate impact is just around 1.6% in 2011 and the estimates increase significantly over the next few years before gradually dropping since 2015. Regarding the heterogeneity by sector and firm size, the estimates seem to be generally influenced by the monetary damages caused by the earthquakes. In particular, these results are driven by the manufacturing (4.6%) and construction sectors (3.5%), followed by services (2.7%). Small and medium firms increased investment by 1.7% and 6.1% respectively. In terms of the financial sources for the reconstruction, affected firms in the region increased shareholder funds and long-term debt. In the third and last essay, I evaluate the 1968 H3N2 Flu pandemic’s economic cost in a cross-section of 52 countries. Using excess mortality rates as a proxy for the country-specific severity of the pandemic, I find that the average mortality rate (0.0062% per pandemic wave) was associated with a decline in output of 2.4% over the two pandemic waves. The estimates also suggest the losses in consumption (-1.9%), investment (-1.2%), and productivity (-1.9%) during the outbreaks. The study adds to the current literature new empirical evidence on the economic consequences of a past pandemic in light of the potential impacts of the Covid-19 pandemic on productivity.</p>

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“How Do Shocks Affect International Reserves? A Quasi-Experiment of Earthquakes”

Jinjarak

2022

Open Econ Rev

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We evaluate the change in international reserves in the aftermath of significant external shocks by using a quasi-experimental setup and focusing on earthquakes. Our objective is to understand the macroeconomic dynamics of quake-affected countries ex-post, and their ex-ante disaster risk mitigation strategies. The estimation is done on a panel of 103 countries over the period 1979–2016. We find that in the five years following a large earthquake: (i) Countries exposed to it accumulate reserves ex-post for precautionary reasons, supported by the inflows of foreign assistance and money expansion; (ii) Quake-prone countries tend to hold fewer reserves relative to the non-prone countries, suggested by the richer set of other disaster preventive measures in place for the former; (iii) The patterns of reserves holding post-earthquake vary with a country’s income level and other macroeconomic fundamentals.

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Impact of hurricanes strikes on international reserves in the Caribbean

Cited by 10 publications

References 33 publications

How Shocks Affect International Reserves? A Quasi-Experiment of Earthquakes

How Shocks Affect International Reserves? A Quasi-Experiment of Earthquakes

Essays on Economic Impacts of Disasters: The Aggregate and Disaggregate Evidence

“How Do Shocks Affect International Reserves? A Quasi-Experiment of Earthquakes”

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