ECONOMETRIC ANALYSIS OF NATURAL DISASTERS’ MACRO-ECONOMIC IMPACTS: AN ANALYSIS ON SELECTED FOUR OECD COUNTRIES

Abstract

The aim of this study is to investigate the macro-economic impacts of the disasters occurring in 4 countries which were selected as members of the OECD between 2005 and 2014. As macro-economic indicators, industrial production index, inflation and unemployment were used. In order to investigate the macro-economic impact of disasters empirically, the estimation model of each variable was found using autoregressive moving average method (ARIMA), which is the analysis of time series, and dummy variable was added to this model. In addition, Augmented Dickey Fuller (ADF) and Phillips Perron (PP) tests, which are used for testing the stability of the series, were employed to be able to use autoregressive models. Considering the analysis results, it has been seen that the dummy variable is statistically significant for selected countries. This indicates that these countries provide increased production by increasing public spending in the context of disaster management after the earthquake. These results are also consistent with the literature on the economic impacts of natural disasters.