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The impact of hurricane strikes on Caribbean sovereign bond returns

Joel Huesler

Financial History Review2025https://doi.org/10.1017/s096856502500006xarticle
AJG 2ABDC B
Weight
0.50

Abstract

This article analyzes the influence of hurricane strikes on the returns of sovereign bonds issued by Cuba, the Dominican Republic and Haiti between 1905 and 1930. The study uses a fixed effects regression model to isolate the impact of hurricane-induced destruction on bond returns, providing a deeper understanding of market reactions following natural disasters. The article shows that hurricanes during this period, which have the potential to cause significant damage, increase bond returns by an average of 0.9 percent in the same month. This suggests that investors demand a risk premium on sovereign bonds from hurricane-prone regions due to the direct impact and broader economic consequences of these disasters.

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https://doi.org/https://doi.org/10.1017/s096856502500006x

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@article{joel2025,
  title        = {{The impact of hurricane strikes on Caribbean sovereign bond returns}},
  author       = {Joel Huesler},
  journal      = {Financial History Review},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1017/s096856502500006x},
}

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The impact of hurricane strikes on Caribbean sovereign bond returns

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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