IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/19704.html

Fiscal Policy’s Role in Economic Resilience to Climate Shocks

Author

Listed:
  • Rezai, Armon
  • Ruch, Franz
  • Choudhary, Rishabh
  • Francois, John Nana Darko

Abstract

The impacts of climate change on developing economies are becoming increasingly severe, creating challenges for risk management and requiring enhanced levels of resilience. This paper explores how to mitigate the effects of such climate shocks on developing economies, placing a particular focus on the role fiscal policy in creating and strengthening an economy’s resilience. Using data on natural disasters, the analysis shows that economies with constrained fiscal space experience more pronounced negative effects. In an application to a small open economy, the paper tests the presence of the non-linearity of short- and long-run disaster impacts in the World Bank's macroeconomic and fiscal model and illustrates the importance of fiscal policy in mitigating shocks.

Suggested Citation

  • Rezai, Armon & Ruch, Franz & Choudhary, Rishabh & Francois, John Nana Darko, 2024. "Fiscal Policy’s Role in Economic Resilience to Climate Shocks," CEPR Discussion Papers 19704, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:19704
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP19704
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:19704. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CEPR (email available below). General contact details of provider: https://cepr.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.