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Abstract
This dissertation consists of three essays that seek to evaluate the impact of storms on prices, savingrates, and the economy. Essay 1 addresses a twofold question: Do market prices change in times of catastrophe?
Are the changes in prices efficient (in that they reflect changes in supply and demand)? Building
upon an optimal pricing model, the paper derives the efficient price changes and lays out an empirical
framework to test whether observed price changes fall within the efficiency range. It applies the framework
to assess price changes for toilet paper, batteries, milk, and bottled water due to Hurricane Harvey in the
United States, using a large dataset of more than 250,000 observations on consumer demand, supplemented
with hurricane and housing assistance data. It uncovers that prices change a little in the hurricane
season, and these small changes are efficient in most cases. Essay 2 describes the static impact of storms
on the economy using a balanced panel of 55 countries in a 69-year long period. The findings suggest
no robust evidence that storms have a static effect on per capita GDP growth, private saving rate, inflation
rate, depreciation rate of capital stock, employment rate, per capita labor income growth, and real
internal rate of return. Essay 3 empirically investigates the dynamic impact of storm events occurring as
the sole natural disaster type in a given country-year on private saving rates. It employs an event study
design using a panel of 176 countries in a 69-year long period. It finds a decrease in annual private saving
rates by 1.85 and 2.29 percentage points four and five years following storms, respectively, and examines
four main channels that may lead to these results. Heterogeneity-robust findings suggest the need for
pro-saving policies in countries prone to intense storm damages, reconstruction jobs, insurance, credit,
and investments in protections against storms, especially in developing countries.