Comparative Analysis of the Effects of Natural Disasters on Volatility in Money and Capital Markets: The Cases of Türkiye and Myanmar

Abstract

This study presents a comparative analysis of the effects of natural disasters on volatility in money and capital markets, focusing on the cases of Türkiye and Myanmar (Burma). The primary objective is to assess the fluctuations observed in financial markets following major earthquakes in both countries and to estimate the economic impacts of these natural disasters. For Türkiye, the analysis covers the period from February 6, 2019, to February 6, 2024, focusing on the market dynamics following the Kahramanmaraş-centered earthquake. In the case of Myanmar, the period from March 28, 2020, to May 28, 2025, is examined to identify market volatility triggered by the earthquake in the Sagaing Region. In the methodology section, ARCH (Autoregressive Conditional Heteroskedasticity) and GARCH (Generalized Autoregressive Conditional Heteroskedasticity) models are employed to analyze the volatility in financial markets that emerged after the earthquakes in both countries, as well as the economic consequences of these natural disasters. These models are selected as appropriate tools for measuring the temporal dynamics of volatility in the financial markets of each country. Additionally, the study provides a detailed examination of the impact of these two major earthquakes on exchange rates. The market responses in Türkiye after the aforementioned earthquake are benchmarked against the market reactions in Myanmar following its seismic event, in order to identify both similarities and differences. By analyzing the market fluctuations observed in the aftermath of each disaster, the study explores the economic implications of such events and discusses the differences in market dynamics based on the economic structures and international market integration of the two countries. The overall analysis aims to provide a comprehensive framework for understanding the uncertainty and volatility in financial markets caused by natural disasters.