Do Remittances Dampen The Effect Of Natural Disasters On Output Growth Volatility In Developing Countries?
This paper analyzes the impact of natural disasters on the output growth volatility. Using a large sample of developing countries and mobilizing a dynamic panel data framework, it uncovers a diminishing macroeconomic destabilizing consequence of natural disasters as remittance inflows rise. It appears that the effect of natural disasters disappears for a remittance ratio above 8% of GDP. However, remittances aggravate the destabilizing effects of natural disasters when they exceed 17% of GDP. The question of the costs of natural disasters becomes crucial following the fear about the consequences of the global warming which could amplify the occurrence of extreme climatic events particularly in the tropical zones.