Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/228096 
Authors: 
Year of Publication: 
2020
Series/Report no.: 
IES Working Paper No. 14/2020
Publisher: 
Charles University in Prague, Institute of Economic Studies (IES), Prague
Abstract: 
We estimate the causal effect of natural catastrophes on financial development. We focus on largest catastrophes in developing economies in 1960-2016, employ synthetic control method to compute the counterfactual and use the credit to GDP ratio as the measure of financial development. Our estimates show that the effects of natural catastrophes are sizable, statistically significant and long-lasting. We find that a decade after the catastrophe, credit/GDP ratio remains approximately 30% below its counterfactual. This result suggests that large-scale natural catastrophes severely undermine financial intermediation in developing economies.
Subjects: 
Natural catastrophes
financial development
synthetic control method
JEL: 
G00
O11
Q54
Q56
Document Type: 
Working Paper

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