The Impact of Natural Disasters on Economic Growth: A Study of Kerala Floods

Natural disasters have potentially large economic impacts on developing nations. There is a small, but growing literature analyzing these impacts on variables such as gross domestic product. In this study the state of Kerala are studied to measure the impact that disasters have had on economic growth especially tourism industry. It is hypothesized that the number of natural disasters that a country faces has a negative impact on economic growth rate as measured by GDP. As the quantity of disasters experienced in any given year increases the overall disruption of the economy is predicted to be greater, thus leading to lower levels of economic growth in the short term. The causes of the high frequency of severe natural disasters have become popular research topics, and the findings have improved the understanding of the relationship between human activities and the environment. However, the exploration into the relationship between natural disasters and long-run economic growth in Kerala tourism has not been minimal. This paper fills this gap by investigating the economic effects of post-disaster rebuilding activities in the current Kerala economic environment.