This paper studies how disasters affect consumer price inflation, one of the main
remaining gaps in our understanding of the impact of disasters. There is a marked
heterogeneity in the impact between advanced economies, where the impact is
negligible, and developing economies, where the impact can last for several years.
There are also differences in the impact by type of disasters, particularly when
considering inflation sub-indices. Storms increase food price inflation in the near
term, although the effect dissipates within a year. Floods also typically have a
short-run impact on inflation. Earthquakes reduce CPI inflation excluding food,
housing and energy.
Parker, Miles (2018). ‘The impact of disasters on inflation’, Economics of Disasters and Climate Change, Springer, Volume 2(1), Pages 21-48, DOI: https://doi.org/10.1007/s41885-017-0017-y.