Using data on the economic damages attributable to a hurricane, I estimate the economy’s response to a hurricane-induced capital shock within a fixed effects panel model. The current account response qualitatively conforms to the S-shaped response predicted by the theory, indicating that countries are engaging in intertemporal trade. Using data on the economic damages attributable to a hurricane, I estimate the economy's response to a hurricane-induced capital shock within a fixed effects panel model. The current account response qualitatively conforms to the S-shaped response predicted by the theory, indicating that countries are engaging in intertemporal trade. Abstract: Hurricanes in the Caribbean and Central America represent a natural experiment to test the intertemporal approach to the current account. The intertemporal approach to the current account allows for the possibility of intertemporal trade, and hence consumption smoothing, through international borrowing. Hurricanes can potentially wreak havoc in the Caribbean, inducing considerable physical damages and potentially discouraging tourism. Given the apparent rise in the number of hurricanes in the region, possibly linked to climatic changes, over the last number of years, Using data on the economic damages attributable to a hurricane, I estimate the economy`s response to a hurricane-induced capital shock within a fixed effects panel model. The current account response qualitatively conforms to the S-shaped response predicted by the theory, indicating that countries are engaging in intertemporal trade.
In economics, general equilibrium theory attempts to explain the behavior of supply, demand, In particular, Walras's model was a long-run model in which prices of capital The Arrow–Debreu model of intertemporal equilibrium contains forward Then, if an equilibrium is unstable and there is a shock, the economy will Jun 6, 2007 change in the current account (i.e., intertemporal trade channel). The more with free trade in goods), a shock to capital stock can be completely accommodated by a change in the responses to hurricanes. As we do not Jun 10, 2009 wind field model on the hurricane `tracks' that allows us to calculate an approximation of the Bluedorn, J.C. (2005). “Hurricanes: Intertemporal Trade and Capital. Shocks”, Nuffield College Economics Paper 2005-W22. 2015-W02 Michael P. Keane Life-Cycle Labor Supply with Human Capital: 2005-W22 John Bluedorn Hurricanes: Intertemporal Trade and Capital Shocks
Coping with Disaster: The Impact of Hurricanes on International Financial Flows, 1970-2001. By Dean Yang. The Death Toll from Natural Disasters: The Role of Income, Geography and Institutions. By Hurricanes: Intertemporal Trade and Capital Shocks. In this paper we investigate the macroeconomic impact of natural disasters in developing countries by examining hurricane strikes in the Central American and Caribbean region. Our innovation in this regard is to employ a windfield model combined with a power dissipation equation on hurricane track data to arrive at a more scientifically based index of potential local destruction. This index Hurricane shocks represent exactly the kind of temporary, country-specific shock required by the theory, allowing for the intertemporal current account response to be estimated without recourse to Natural-disaster shocks and government's behavior: Evidence from middle-income countries. Author links open overlay panel Nadia Benali a Ines Abdelkafi b They found that floods shocks tend to have a positive impact on economic growth. Hurricanes: Intertemporal Trade and Capital Shocks. Nuffield College Economics Paper 2005-W22, 2005 Of particular concern to all households, especially the poorest segments of the population, is the exposure to shocks that are generated by catastrophic events or natural disasters. Auffret shows that despite high consumption growth, the Caribbean region suffers from a high volatility of consumption that decreases household welfare. Typhoons destroy durable assets and depress incomes, leading to broad expenditure reductions achieved in part through disinvestments in health and human capital. Infant mortality mirrors these economic responses, and additional findings -- that only female infants are at risk, that sibling competition elevates risk, International Macroeconomics, Chapter 3 Schmitt-Groh´e, Uribe, Woodford. Observations On The Intertemporal Budget Constraint • It’s slope is −(1+r1), because if you sacrifice one unit of consumption and put it in the bank for one period, you get 1+r1 units next period.
Hurricanes: Intertemporal Trade and Capital Shocks. Hurricanes in the Caribbean and Central-America represent a natural experiment to test the intertemporal approach to current account determination. The intertemporal approach allows for the possibility of intertemporal trade, via international borrowing. Using data on the economic damages attributable to a hurricane, I estimate the economy`s response to a hurricane-induced capital shock within a fixed effects panel model. The current account response qualitatively conforms to the S-shaped response predicted by the theory, indicating that countries are engaging in intertemporal trade. Using data on the economic damages attributable to a hurricane, I estimate the economy`s response to a hurricane-induced capital shock within a fixed effects panel model. The current account response qualitatively conforms to the S-shaped response predicted by the theory, indicating that countries are engaging in intertemporal trade. evidence of intertemporal trade taking place in response to the large, country-specific, negative capital shocks caused by hurricanes. This manifests as a current account re-sponse that is similar to that described above: the current account falls initially, as output falls and investment rises; the current account then rises, as saving rises and in-
May 18, 2019 United nations ConferenCe on trade and development with an open capital account cannot absorb external shocks efficiently by similar to the ones provided after Hurricane Mitch in 1998 and the tsunami in 2005. intertemporal relationship between futures and spot prices on commodity exchanges. Products 1 - 2005 product pipelines due to the 2005 hurricanes led to large gasoline Futures Market Trading and Crude Oil Prices. capital for those investing in the petroleum industry.” 20 found that OPEC members respond to demand and cost shocks 150 Michael D. Noel, Edgeworth Cycles and Intertemporal Price