Impact of hurricanes strikes on international reserves in the Caribbean

Eric Strobl, Bazoumana Ouattara, Sandrine Akassi Kablan*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)


In this study, we investigate the impacts of hurricane shocks on the international reserves of Caribbean countries. To this end, we use a panel VARX (Vector Auto-Regressive, with exogenous variables) with monthly data that allow us to account for external shocks (hurricane strikes). Our results show that for the whole sample, an increase in foreign reserves a month after the strike was followed by a decrease 2 months later. The increase can be explained by remittances and emergency foreign aid granted by the International Monetary Fund. Dividing the sample into middle-income and high-income countries shows that the increase is mainly due to the latter. This outcome may not be surprising given that production in Caribbean high-income countries is mainly due to manufacturing, off-shore banking and natural resources exploitation, which are all non-weather dependent sectors, while the middle-income countries are mostly dependent on weather-prone agriculture and tourism.

Original languageEnglish
Pages (from-to)4175-4185
Number of pages11
JournalApplied Economics
Issue number38
Publication statusPublished - 14 Aug 2020

Bibliographical note

Publisher Copyright:
© 2020, © 2020 Informa UK Limited, trading as Taylor & Francis Group.


  • foreign aid
  • international reserves
  • Natural disasters
  • panel VARX
  • remittances

ASJC Scopus subject areas

  • Economics and Econometrics


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