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This paper examines the impact of hurricane exposure on international resource flows, including remittances to developing countries. Using meteorological data, the author constructs a time-varying storm index that accounts for the fraction of a country’s population exposed to storms of varying intensities over time. The author finds that the impact of hurricane exposure on resource flows varies according to the receiving country’s income level. In the poorer half of the sample, hurricane exposure leads to a substantial increase in migrants’ remittances, such that total inflows from all sources in the three years following hurricane exposure amounts to roughly three-fourths of estimated damages. However, in the richer half of the sample, hurricane exposure stimulates inflows of new lending from multilateral institutions, but induces declines in private financial flows that are very large.

Publication Details

Title
Coping with Disaster: The Impact of Hurricanes on International Financial Flows, 1970-2002
Authors
Yang, Dean C
Publisher
B.E. Journal of Economic Analysis & Policy
Publish Date
2008
Citation
Yang, Dean C, Coping with Disaster: The Impact of Hurricanes on International Financial Flows, 1970-2002 (B.E. Journal of Economic Analysis & Policy, 2008).
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