Abstract
This paper examines the effect of natural disasters on the savings rate in developing countries. There are different theories on the effects of natural disasters on economic factors. This paper contributes to the existing literature by testing these theories through a panel data analysis. Despite the scarcity of the data, the analysis revealed tendencies in the savings behavior following natural disasters in developing countries. It shows that households first suffer from the direct effect and dig into their savings, they than increase their savings rate in order to save money to rebuild what was destroyed or damaged, and after a few years, the savings rate falls again.
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