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The short-run nationwide macroeconomic effects of the Canterbury earthquakes

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  • Lisa Doyle
  • Ilan Noy

Abstract

We examine the short-run impact of the two Canterbury earthquakes (4/9/2010 and 22/2/2011) on the New Zealand economy using vector autoregressive models. Maybe surprisingly, we find little evidence of a pronounced impact on the aggregate economy. Our results suggest that the earthquakes reduced consumer price index inflation moderately, and the first earthquake had a small but short-lived, adverse effect on the real gross domestic product growth. At the very worse, it appears that policies (by the government and the Reserve Bank) have been successful in mitigating any serious adverse macroeconomic impact. The more significant impact of the earthquakes is to be found at the regional level.

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  • Lisa Doyle & Ilan Noy, 2015. "The short-run nationwide macroeconomic effects of the Canterbury earthquakes," New Zealand Economic Papers, Taylor & Francis Journals, vol. 49(2), pages 134-156, August.
    • Handle: RePEc:taf:nzecpp:v:49:y:2015:i:2:p:134-156
    DOI: 10.1080/00779954.2014.885379
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    3. Albuquerque, Pedro H. & Rajhi, Wassim, 2019. "Banking stability, natural disasters, and state fragility: Panel VAR evidence from developing countries," Research in International Business and Finance, Elsevier, vol. 50(C), pages 430-443.
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    6. Diego D'iaz & Pablo Paniagua & Cristi'an Larroulet, 2024. "Earthquakes and the wealth of nations: The cases of Chile and New Zealand," Papers 2405.12041, arXiv.org.
    7. Jeroen Klomp & John Sseruyange, 2021. "Earthquakes and Economic Outcomes: Does Central Bank Independence Matter?," Open Economies Review, Springer, vol. 32(2), pages 335-359, April.
    8. John Beirne & Yannis Dafermos & Alexander Kriwoluzky & Nuobu Renzhi & Ulrich Volz & Jana Wittich, 2021. "The Effects of Natural Disasters on Price Stability in the Euro Area," Discussion Papers of DIW Berlin 1981, DIW Berlin, German Institute for Economic Research.
    9. Klomp, Jeroen, 2020. "Do natural disasters affect monetary policy? A quasi-experiment of earthquakes," Journal of Macroeconomics, Elsevier, vol. 64(C).
    10. Xiaojia Bao & Jianan Li & Puyang Sun, 2019. "Typhoon, Earthquake and Food Price: Evidence from China," Working Papers 2019-07-08, Wang Yanan Institute for Studies in Economics (WISE), Xiamen University.
    11. Hallegatte, Stéphane & Jooste, Charl & McIsaac, Florent, 2024. "Modeling the macroeconomic consequences of natural disasters: Capital stock, recovery dynamics, and monetary policy," Economic Modelling, Elsevier, vol. 139(C).

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