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The impact of tropical storms on the accumulation and composition of government debt

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  • Preeya Mohan

    (University of the West Indies)

  • Eric Strobl

    (University of Bern)

Abstract

This paper investigates the impact of tropical storms on government debt accumulation and decomposition. To this end, we combine quarterly debt data and tropical storm loss data for the period 1993–2013 for the Eastern Caribbean. Our econometric results show that damaging storms cause debt to increase up to three quarters after the event, where this increase can be considerable for damaging enough storms. Much of this increase in debt is due to borrowing from foreign lenders by the central government. At the same time, there is also some shifting of the share of debt toward public corporations, although these tend to react more by financing from domestic sources.

Suggested Citation

  • Preeya Mohan & Eric Strobl, 2021. "The impact of tropical storms on the accumulation and composition of government debt," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(3), pages 483-496, June.
    • Handle: RePEc:kap:itaxpf:v:28:y:2021:i:3:d:10.1007_s10797-020-09622-5
    DOI: 10.1007/s10797-020-09622-5
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    Cited by:

    1. Mohan, Preeya S., 2022. "Climate finance to support Caribbean Small Island Developing States efforts in achieving their Nationally Determined Contributions in the energy sector," Energy Policy, Elsevier, vol. 169(C).
    2. Preeya S. Mohan, 2023. "Financing needs to achieve Nationally Determined Contributions under the Paris Agreement in Caribbean Small Island Developing States," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 28(5), pages 1-24, June.
    3. Cuadros-Solas, Pedro J. & Salvador, Carlos & Suárez, Nuria, 2021. "Am I riskier if I rescue my banks? Beyond the effects of bailouts," Journal of Financial Stability, Elsevier, vol. 56(C).
    4. Tian Zhao & Zhixin Liu, 2022. "Drivers of CO 2 Emissions: A Debt Perspective," IJERPH, MDPI, vol. 19(3), pages 1-18, February.

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    More about this item

    Keywords

    Tropical storms; Debt;

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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