We estimate the causal effect of natural catastrophes on financial depth. We focus on largest catastrophes in 1960–2016, employ synthetic control method to compute the counterfactual and use the private credit to GDP ratio as the measure of financial deepening. Our estimates show that the effects of natural catastrophes are sizable, statistically significant and long-lasting. We find that a decade after the catastrophe, credit/GDP ratio remains approximately 30% below its counterfactual. This result suggests that large-scale natural catastrophes severely undermine financial deepening in developing economies.

中文翻译：

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自然灾害和财务深度：实证分析

我们估计自然灾害对财务深度的因果关系。我们将重点放在1960-2016年的大灾难上，采用综合控制方法来计算反事实，并使用私人信贷与GDP的比率来衡量金融深化的程度。我们的估计表明，自然灾害的影响是巨大的，具有统计意义的并且是持久的。我们发现，在灾难发生十年后，信贷/ GDP比率仍比事实低约30％。这一结果表明，大规模自然灾害严重破坏了发展中经济体的金融深化。