Autor: Baioni Tomás
Institución: UNLP
Año: 2025
JEL: H70, Q54
Resumen:
One of the salient aspects of climate change is the increment of both the intensity and frequency of natural disasters. This paper addresses how these factors interplay at a local level, focusing on Chilean regions at a quarterly basis for the period 2009-2025, using the local projections method. Results suggest that on average, a 1% shock in natural disasters' intensity has an immediate negative effect in employment by 0.06%, and an immediate negative effect on the debt market, increasing the household debt by 0.1 p.p. Overall, my results suggest that a 1% shock in natural disasters' intensity has an immediate positive effect in real GDP by 0.02%, and a significant long-term negative effect on GDP by 0.05%, potentially showing signs of reallocation of a country's income. When analyzing natural disasters' frequency, estimates suggest that Chilean regions that suffer a natural disaster are more likely to experience short-term decreases in employment and increases in household debt, and lower GDP, although the latter effect is found to not be statistically significant. I rely on a panel VAR model to estimate the impact of natural disasters' intensity as robustness checks, and find that my original conclusions hold: natural disasters have a short-term negative effect on employment at 0.01% and a long-term negative effect on growth at 0.2%.