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Natural disasters and economic growth in Northeast Brazil: evidence from municipal economies of the Ceará State

Published online by Cambridge University Press:  30 January 2019

Victor Hugo de Oliveira Open the ORCID record for Victor Hugo de Oliveira [Opens in a new window]
Victor Hugo de Oliveira*
Affiliation:
Instituto de Pesquisa e Estratégia Econômica do Ceará (IPECE), Fortaleza, Ceará, Brasil
*
*Corresponding author. E-mail: [email protected]
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Abstract

Based on an unexplored data set on disasters in Brazil, the current study shows that the direct damage of natural disasters reduces the GDP growth rate of municipal economies in Ceará state, Northeast Brazil. The agriculture and service sectors are the most affected economic sectors, while the industrial sector remains unaffected by environmental shocks. Economic growth is particularly responsive to the occurrence of large natural disasters that lead municipalities to declare a state of emergency or public calamity. Regarding public policies, water supply infrastructure increases the resilience of the output growth of services to droughts, whereas disaster microinsurance helps to mitigate the effects of droughts and floods on the economic growth of agriculture in a Brazilian state where family farming is predominant and highly vulnerable to natural disasters.

Keywords

BrazilCearáeconomic growthnatural disastersO44Q54
Type
Research Article
Information
Environment and Development Economics , Volume 24 , Issue 3 , June 2019 , pp. 271 - 293
Copyright
Copyright © Cambridge University Press 2019 

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