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There is an ongoing debate on whether disasters cause significant macroeconomic impacts and are truly a potential impediment to economic development. This paper aims to assess whether and by what mechanisms disasters have the potential to cause significant GDP impacts. The analysis first studies the counterfactual versus the observed gross domestic product. Second, the analysis assesses disaster impacts as a function of hazard, exposure of assets, and, importantly, vulnerability. In a medium-term analysis (up to 5 years after the disaster event), comparing counterfactual with observed gross domestic product, the authors find that natural disasters on average can lead to negative consequences. Although the negative effects may be small, they can become more pronounced depending mainly on the size of the shock. Furthermore, the authors test a large number of vulnerability predictors and find that greater aid and inflows of remittances reduce adverse macroeconomic consequences, and that direct losses appear most critical.

Conflict and Development --- Currencies and Exchange Rates --- Debt Markets --- Disaster --- Disaster event --- Disaster events --- Disaster Management --- Disaster reduction --- Disaster risk --- Disaster risk reduction --- Drought --- Droughts --- Earthquake --- Earthquakes --- Economic Theory and Research --- Emerging Markets --- Environment --- Finance and Financial Sector Development --- Flood --- Floods --- Hazard Risk Management --- Hurricane --- Macroeconomics and Economic Growth --- Natural disaster --- Natural disaster reduction --- Natural Disasters --- Natural disasters --- Natural hazards --- Private Sector Development --- Reconstruction --- Storm --- Storms --- Urban Development