This paper incorporates the dividend recovery feature into the variable disaster model of Gabaix (2012). The recovery redistributes risk to the short end and volatility to the long end, leading to the following equity term structures: (1) for one-period return, the average slope is downward with...

We examine the stock market reaction to natural and man-made disasters in potash mines. We use a sample of 44 mining accidents worldwide over the period 1995-2016. A quarter of the accidents were the result of a natural disaster, such as flooding, that often ended in the closure of the potash...