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How do natural disasters impact the exchange rate: an investigation through small island developing states (SIDS)?

Author

Listed:
  • Eric Strobl

    (Université d'Aix-Marseille)

  • Sandrine Kablan

    (ERUDITE, Université de Paris Est Créteil)

Abstract

We investigate the response of the real effective exchange rate to tropical cyclones in small island developing states. Our results show that under flexible exchange rate regimes there is a real exchange appreciation up to two months after the storm. In contrast, a fixed exchange rate almost completely buffer an appreciation.

Suggested Citation

  • Eric Strobl & Sandrine Kablan, 2017. "How do natural disasters impact the exchange rate: an investigation through small island developing states (SIDS)?," Economics Bulletin, AccessEcon, vol. 37(3), pages 2274-2281.
  • Handle: RePEc:ebl:ecbull:eb-17-00444
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    File URL: http://www.accessecon.com/Pubs/EB/2017/Volume37/EB-17-V37-I3-P203.pdf
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    Citations

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    Cited by:

    1. Alessio Ciullo & Eric Strobl & Simona Meiler & Olivia Martius & David N. Bresch, 2022. "Increasing countries financial resilience through global catastrophe risk pooling," Papers 2206.13895, arXiv.org.
    2. Preeya S. Mohan, 2023. "The Impact of Tropical Storms on International Trade: Evidence from Eastern Caribbean Small Island Developing States," Economics of Disasters and Climate Change, Springer, vol. 7(2), pages 179-208, July.
    3. Alessio Ciullo & Eric Strobl & Simona Meiler & Olivia Martius & David N. Bresch, 2023. "Increasing countries’ financial resilience through global catastrophe risk pooling," Nature Communications, Nature, vol. 14(1), pages 1-9, December.
    4. Galina Hale, 2024. "Climate Disasters and Exchange Rates: Are Beliefs Keeping up with Climate Change?," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 72(1), pages 253-291, March.
    5. Mohan, Preeya, 2023. "The Impact of Tropical Storms on International Trade: Evidence from Eastern Caribbean Small Island Developing States," IDB Publications (Working Papers) 13084, Inter-American Development Bank.
    6. Hale, Galina, 2024. "Climate Disasters and Exchange Rates: Are Beliefs Keeping up with Climate Change?," Santa Cruz Department of Economics, Working Paper Series qt7cz1p5k7, Department of Economics, UC Santa Cruz.

    More about this item

    Keywords

    Exchange rate regime; real effective exchange rate; natural disasters; small island developing states.;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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