Working Paper Series: Special Edition of 2016 to 2018 Interns

Data on the cost of damages incurred by the natural disasters were supplemented by the reports done by the governments of the respective countries in conjunction with other organisations such as the World Bank and the Economic Commission for Latin American and the Caribbean (ECLAC). 4.2 Model In order to assess the impact of natural disasters on economic growth, two panel data models were utilised. The models are specified as follows: = + 1 + 2 + 3 + 4 + 5 1 + + (1) = + 1 + 2 + 3 + 4 + 5 2 + + (2) Where: − Subscripts i and t represent the country and time effects respectively; − captures the unobserved country effect; − is the growth rate of real GDP; − is government consumption (% of GDP); − is the growth rate of the population; − is Foreign Direct Investment Inflows (% of GDP); − is the growth rate of GDP of the United States of America; − 1 is the natural disaster occurrences dummy variable (1 if a natural disaster occurred, 0 otherwise); − 2 is the intense natural disaster dummy variable (1 if a natural disaster incurs damages greater than 1 per cent of GDP, 0 otherwise); − is the between-entity error term; − is the within-entity error term;

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