Macroeconomic impacts of the 2010 earthquake in Haiti
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PhD Seminar (Econ)
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The 2010 earthquake in Haiti caused major economic impacts in addition to the catastrophic loss of life. The massive negative impacts were evident in national macroeconomic data, in contrast to national data for many other natural disasters in other countries. This paper uses the synthetic control method to estimate the impact of the earthquake on GDP. I calculate a loss of approximately eight per cent on average from the earthquake in 2010 to 2013. This is equivalent to an average annual loss of approximately 1.2 billion in Purchasing Power Parity constant 2011 international dollars. Further, the trajectory of GDP has not shown any clear signs of returning to the pre-earthquake growth path. I also show the impacts on components of GDP and sectors of production. The services sector has been subject to sustained impairment, while the industrial sector has recovered towards the pre-earthquake growth path more quickly. Policymakers have a difficult challenge of prioritising different objectives, balancing disaster response and risk reduction with broader development aspirations. I support the case for integrated policy responses to severe earthquakes, such as the 2010 Haitian earthquake. Investment in disaster risk reduction and focus on increasing resilience are key components of integrated sustainable development agendas.
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