IMPACT OF NATURAL DISASTERS ON ECONOMIC ACTIVITY

ABSTRACT Natural shocks and climatic disasters have been causing great destruction to human life and property. These shocks and disasters have often damaged the economy and caused a massive loss to the affected nation. A large amount of aid is necessary for recovery from such natural shocks. We propose to examine and compare the impact of natural disasters on economic activity. The type of natural disaster considered here is earthquakes, and the variable for economic activity is Merchandise Imports. We find that the natural disasters have a significant impact on the economic activity and the results vary based on the form of government and the level of development within the country. Keywords Natural disasters, Earthquakes, Merchandise imports.