Impacts of Earthquakes on Economic Growth and Income Inequality in Independent Turkic States

Abstract

Earthquakes are major natural disasters that occur frequently worldwide. They have several socioeconomic impacts on countries. At first glance, it seems that as if they cause only large volumes of deaths, injuries and destruction. However, in the medium and long run, they cause several other impacts such as income, employment and production losses, increased government expenditures, inflation explosions and income distortions. All of these impacts are critical especially for developing countries that have more vulnerable economies than developed ones. In this respect, this study aims to analyse the impacts of massive earthquakes on economic growth and income inequality in independent Turkic states. With this purpose, two empirical models are estimated by the Generalized Method of Moments (GMM) with panel data covering the period from 1991 – 2022 for 6 countries. Empirical findings exhibit that major earthquakes do not have significant impacts on the economic growth processes of these countries. However, they have significant impacts on income distortions. In this manner, it seems that despite massive earthquakes, Turkic states have been able to sustain their economic growth processes. However, income inequality has increased as a byproduct of these disasters. This evidence seems substantial for sustainable development policy formations of Turkic states.