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Abstract This study investigates the effect of flash floods on local economic activity in Central America and the Caribbean. I measure these rarely analyzed floods by constructing a high-resolution, physically based index of flash flood occurrence from satellite data and connect these to changes in local night light emissions. After accounting for tropical cyclone activity, flash floods have a delayed, short-term negative effect on economic activity. In countries with a low to medium human development index (HDI), the average negative effect can be up to 5. 6\% 5. 6 % in the following months. Countries with higher HDI appear more resilient and are only marginally affected. Also, flash floods exhibit a minor positive spatial spillover in low to medium HDI countries, besides their more substantial local negative effect. Due to their high frequency, flash floods have a detrimental effect on local economic growth in developing countries that will likely be exacerbated by climate change. (JEL)
Dino Collalti (Fri,) studied this question.