Assessing the macroeconomic impacts of natural disasters : are there any ?
AbstractThere is an ongoing debate on whether disasters cause significant macroeconomic impacts and are truly a potential impediment to economic development. This paper aims to assess whether and by what mechanisms disasters have the potential to cause significant GDP impacts. The analysis first studies the counterfactual versus the observed gross domestic product. Second, the analysis assesses disaster impacts as a function of hazard, exposure of assets, and, importantly, vulnerability. In a medium-term analysis (up to 5 years after the disaster event), comparing counterfactual with observed gross domestic product, the authors find that natural disasters on average can lead to negative consequences. Although the negative effects may be small, they can become more pronounced depending mainly on the size of the shock. Furthermore, the authors test a large number of vulnerability predictors and find that greater aid and inflows of remittances reduce adverse macroeconomic consequences, and that direct losses appear most critical.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 4968.
Date of creation: 01 Jun 2009
Date of revision:
Natural Disasters; Economic Theory&Research; Hazard Risk Management; Disaster Management; Currencies and Exchange Rates;
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