CASE STUDY: THE EFFECTS OF NATURAL DISASTERS ON THE GDP OF THE PHILIPPINES
CASE STUDY: THE EFFECTS OF NATURAL DISASTERS
ON THE GDP OF THE PHILIPPINES
In Partial Fulfillment
Of the course requirements
In ECOMET2
Submitted By:
Inacay, Giancarlo
Submitted To:
Dr. Cesar Rufino
School of Economics
De La Salle University-Manila
December 16, 2014
Table of Contents
I.
Introduction
II.
Review of Related Literature
III.
Theoretical Framework
IV.
Data
V.
Methodology
VI.
Results
VII.
Appendix
VIII.
Bibliography
Abstract
The Philippines is located in a region prone to numerous natural disasters and these natural disasters greatly affect the economy of the Philippines. Now because of the numerous disasters the location of Philippines brings, the government has to compensate for the destruction by spending on the rebuilding of damaged infrastructures and affected conditions in the country, i.e. the destruction typhoon Haiyan (Yolanda) brought to the country. Destruction of property costs billions while rebuilding is just as bad, the researchers would like to see if these natural disasters actually increase the GDP because it can be observed that during calamities, it can be expected that consumption increases drastically to match consumer needs as well as government expenditures boost up or drop down to compensate for at least a portion of the damages the typhoon caused. This paper will use data coming from the world bank with a time period of 1960 until 2013. Aside from that, this paper will use time series regressions to show the relationship between the natural disasters and GDP.
Keywords: GDP, natural disasters, disaster economics, environmental economics, consumption, government spending
1. Introduction
The Philippines, a country that lies along the Ring of Fire, is one of the most prominent hazard-‐prone areas in the world and its adverse effects can cause an increase in the number
ON THE GDP OF THE PHILIPPINES
In Partial Fulfillment
Of the course requirements
In ECOMET2
Submitted By:
Inacay, Giancarlo
Submitted To:
Dr. Cesar Rufino
School of Economics
De La Salle University-Manila
December 16, 2014
Table of Contents
I.
Introduction
II.
Review of Related Literature
III.
Theoretical Framework
IV.
Data
V.
Methodology
VI.
Results
VII.
Appendix
VIII.
Bibliography
Abstract
The Philippines is located in a region prone to numerous natural disasters and these natural disasters greatly affect the economy of the Philippines. Now because of the numerous disasters the location of Philippines brings, the government has to compensate for the destruction by spending on the rebuilding of damaged infrastructures and affected conditions in the country, i.e. the destruction typhoon Haiyan (Yolanda) brought to the country. Destruction of property costs billions while rebuilding is just as bad, the researchers would like to see if these natural disasters actually increase the GDP because it can be observed that during calamities, it can be expected that consumption increases drastically to match consumer needs as well as government expenditures boost up or drop down to compensate for at least a portion of the damages the typhoon caused. This paper will use data coming from the world bank with a time period of 1960 until 2013. Aside from that, this paper will use time series regressions to show the relationship between the natural disasters and GDP.
Keywords: GDP, natural disasters, disaster economics, environmental economics, consumption, government spending
1. Introduction
The Philippines, a country that lies along the Ring of Fire, is one of the most prominent hazard-‐prone areas in the world and its adverse effects can cause an increase in the number
Bibliography: Abdelkha, S., Sulaiman, J., & Mohd, S. (2011). A Bounds Testing To Cointegration: An Examination of Natural Disasters and GDP Relationship in Souhtern Arnason, P. (2011). The paradox of natural disasters leading to economic growth: The case of Touhoku earthquake Blanchard, O. (2011). Macroeconomics, 5th ed. Singapore: Pearson Education, Inc. Cavallo, E., Galiani, S., Noy, I., & Pantano, J. (2010). Catastrophic Natural Disasters and Economic Growth http://www.economics.hawaii.edu/research/workingpapers/WP_10-6.pdf EM-DAT| The International Disaster Database (2009) Fomby, T., Ikeda, Y., & Loayza, N. (2009). The Growth Aftermath of Natural Disasters. Gujarati, D., & Porter, D. (2009). Basic Econometrics, 5th ed. New York, NY: McGraw-Hill International, Inc. Hill, R. C., Griffiths, W. E., & Lim, G. C. (2011). Principles of Econometrics. Kim, C. (2010). The Effects Of Natural Disasters On Long-Run Economic Growth.Michigan| Journal of Business, (41), 11-49 Quismundo, T. (2012, October 16). Philippines is 3rd most disaster-prone country, new study shows Rufino, C. (2011). Analyzing the Philippines Inter-Regional Market Integration for Rice.International Research Journal of Finance and Economics, 14502887(69). Skidmore, M., & Toya, H. (2007). Economic development and the impacts of natural disasters Vos, Femke. Rodriguez, Jose. Below Regina. Guha-Sapir, D. (2014). Annual disaster statistical review: The numbers and trends 2013