Macroeconomic Implications Of Natural Disasters In The Caribbean
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Macroeconomic Implications of Natural Disasters in the Caribbean by Tobias Rasmussen Pdf
Each year natural disasters affect about 200 million people and cause about $50 billion in damage. This paper compares the incidence of natural disasters across countries along several dimensions and finds that the relative costs tend to be far higher in developing countries than in advanced economies. The analysis shows that small island states are especially vulnerable, with the countries of the Eastern Caribbean standing out as among the most disaster-prone in the world. Natural disasters are found to have had a discernible macroeconomic impact, including large effects on fiscal and external balances, pointing to an important role for precautionary measures.
Macroeconomic Implications of Natural Disasters in the Caribbean by Mr.Tobias N. Rasmussen Pdf
Each year natural disasters affect about 200 million people and cause about $50 billion in damage. This paper compares the incidence of natural disasters across countries along several dimensions and finds that the relative costs tend to be far higher in developing countries than in advanced economies. The analysis shows that small island states are especially vulnerable, with the countries of the Eastern Caribbean standing out as among the most disaster-prone in the world. Natural disasters are found to have had a discernible macroeconomic impact, including large effects on fiscal and external balances, pointing to an important role for precautionary measures.
The Economic Impacts of Natural Disasters by Debarati Guha-Sapir,Indhira Santos,Alexandre Borde Pdf
Since the turn of the millennium, more than one million people have been killed and 2.3 billion others have been directly affected by natural disasters around the world. In cases like the 2010 Haiti earthquake or the 2004 Indian Ocean tsunami, these disasters have time and time again wrecked large populations and national infrastructures. While recognizing that improved rescue, evacuation, and disease control are crucial to reducing the effects of natural disasters, in the final analysis, poverty remains the main risk factor determining the long-term impact of natural hazards. Furthermore, natural disasters have themselves a tremendous impact on the poorest of the poor, who are often ill-prepared to deal with natural hazards and for whom a hurricane, an earthquake, or a drought can mean a permanent submersion in poverty. The Economic Impacts of Natural Disasters focuses on these concerns for poverty and vulnerability. Written by a collection of esteemed scholars in disaster management and sustainable development, the report provides an overview of the general trends in natural disasters and their effects by focusing on a critical analysis of different methodologies used to assess the economic impact of natural disasters. Economic Impacts presents six national case studies (Bangladesh, Vietnam, India, Nicaragua, Japan and the Netherlands) and shows how household surveys and country-level macroeconomic data can analyze and quantify the economic impact of disasters. The researchers within Economic Impacts have created path-breaking work and have opened new avenues for thinking and debate to push forward the frontiers of knowledge on economics of natural disasters.
Debt, Growth and Natural Disasters A Caribbean Trilogy by Sebastian Acevedo Mejia Pdf
This paper seeks to determine the effects that natural disasters have on per capita GDP and on the debt to GDP ratio in the Caribbean. Two types of natural disasters are studied –storms and floods– given their prevalence in the region, while considering the effects of both moderate and severe disasters. I use a vector autoregressive model with exogenous natural disasters shocks, in a panel of 12 Caribbean countries over a period of 40 years. The results show that both storms and floods have a negative effect on growth, and that debt increases with floods but not with storms. However, in a subsample I find that storms significantly increase debt in the short and long run. I also find weak evidence that debt relief contributes to ease the negative effects of storms on debt.
Natural Disasters and Scarring Effects by Weicheng Lian,Jose Ramon Moran,Raadhika Vishvesh Pdf
This paper uses a novel empirical approach, following the literature on hysteresis, to explore medium-term scarring of natural disasters for countries vulnerable to climate change. By quantifying the dynamic effects of natural disasters on real GDP per capita for a large number of episodes using a synthetic control approach (SCA) and focusing on severe shocks, we demonstrate that a persistently large deviation of real GDP per capita from the counterfacutal trend exists five years after a severe shock in many countries. The findings highlight the importance and urgency of building ex-ante resilience to avoid scarring effects for countries prone to natural disasters, such as those in the Caribbean region.
Author : International Monetary Fund Publisher : International Monetary Fund Page : 370 pages File Size : 41,7 Mb Release : 2006-09-14 Category : Business & Economics ISBN : STANFORD:36105122970168
This book sets out the economic challenges facing the island nations of the Caribbean and presents policy options to ameliorate external shocks and embark firmly on a sustained growth path. While the countries of the Eastern Caribbean Currency Union that are the focus of the book have enjoyed a sustained period of price and exchange rate stability, they have been buffeted in recent years by adverse shocks, including the erosion of trade preferences, declines in official foreign assistance, and frequent natural disasters. Strengthening their growth performance will require design of a multifaceted strategy that integrates the Caribbean with the global economy, facilitates an economic transformation from agriculture to tourism, fosters greater regional cooperation, and preserves macroeconomic stability. This volume examines the critical issues that are part of that process, including fiscal and financial sector policy, management of external flows, trade integration and tourism, macroeconomic cycles and volatility, and the economic implications of natural disasters.
High consumption Volatility by Philippe Auffret Pdf
A history of repeated external and domestic shocks has made economic insecurity a major concern across the Caribbean region. Of particular concern to all households, especially the poorest segments of the population, is the exposure to shocks that are generated by catastrophic events or natural disasters. The author shows that despite high consumption growth, the Caribbean region suffers from a high volatility of consumption that decreases household welfare. After presenting some empirical evidence that consumption volatility is higher in the Caribbean region than in the rest of the world, he makes some empirically testable inferences that help explain consumption volatility. The author develops a conceptual framework for analyzing the effects of catastrophic events on household and aggregate welfare. According to this framework, the volatility of consumption comes from production shocks that are transformed into consumption shocks mostly because of underdeveloped or ineffective risk-management mechanisms. Auffret conducts an empirical analysis of the impact of catastrophic events on 16 countries (6 from the Caribbean region and 10 from Latin America) from 1970-99 and shows that catastrophic events lead to: 1) A substantial decline in the growth of output. 2) A substantial decline in the growth of investment. 3) A more moderate decline in consumption growth (most of the decline is in private consumption, while public consumption declines moderately. 4) A worsening of the current account of the balance of payments.
Understanding the Economic and Financial Impacts of Natural Disasters by Charlotte Benson,Edward J. Clay Pdf
Disaster prevention and mitigation are integral to development activities. In February 2000, the World Bank's Disaster Management Facility initiated a three-year study on the economic and financial consequences of natural disasters with the support of the U.K. Department for International Development.
Economics of Natural Disasters and Climate Change by Derya Dogan Pdf
Master's Thesis from the year 2012 in the subject Economics - Macro-economics, general, grade: 1,3, University of Wuppertal (Schumpeter School of Business and economics), course: VWL, Makroökonomie, language: English, abstract: During past centuries, natural disasters occurred more often in our environment and caused more serious damage worldwide. The Hurricane Irene in the Caribbean and the USA, the floods in Australia, the earthquake in New Zealand and especially in Japan in 2011 had enormous extends concerning the caused loss and damages in the specific regions. Within the past four decades, the frequency of large natural disasters raised three times more. Furthermore, the economic losses - after adjusting for inflation – increased even eight times more compared to the past decades. This also has a great impact on the insurance industry, since the insured losses increase even in a larger amount compared to other factors affected by natural disasters. However, the insurance industry uses in spite of these unfavorable loss trends, a wide range of coverage against disasters such as Cat Bonds to transfer the disaster risk, and to avoid unnecessary expenses. Climate change also plays a big role in the frequently occurring amount of disasters. Since it is still hard to estimate the impacts of future climate changes for the frequency and intensity of natural disasters with its huge losses, new policies such as Green Growth have been introduced for mitigation effects. The purpose of this thesis is to represent and describe the economics of natural disasters due to climate change with its macroeconomic aspects and structural effects. While demonstrating the impacts on natural disasters to a region’s economy, it is important to know that many other factors are linked with natural disasters that have an effect on a region’s economy. Therefore, after defining the important terms in the first section of this thesis, the scope and costs of natural disasters will be illustrated in chapter 2 for a better demonstration of the disaster events impacts in general. This will start by describing the reasons for climate change to demonstrate in the latter the increasing number of disaster appearances due to the effects of climate change. Different regions will be considered within this analysis, whereas in the following sections only the regions which are economically vulnerable to natural disasters will be taken into account to illustrate the costs of natural disasters........
Excerpt: Unleashing Growth and Strengthening Resilience in the Caribbean by Mr.Krishna Srinivasan,Ms.Inci Ötker,Ms.Uma Ramakrishnan,Mr.Trevor Serge Coleridge Alleyne Pdf
This book provides a diagnosis of the central economic and financial challenges facing Caribbean policymakers and offers broad policy recommendations for promoting a sustained and inclusive increase in economic well-being. The analysis highlights the need for Caribbean economies to make a concerted effort to break the feedback loops between weak macroeconomic fundamentals, notably pertaining to fiscal positions and financial sector strains, and structural impediments, such as high electricity costs, limited financial deepening, violent crime, and brain drain, which have depressed private investment and growth. A recurring theme in the book is the need for greater regional coordination in finding solutions to address the Caribbean’s shared and intertwined macroeconomic and structural challenges. The analysis suggests that strengthening regional and global market integration of Caribbean economies would provide an impetus to sustained growth in incomes and jobs. Greater regional and global economic integration would also facilitate structural transformation and a shift toward new economic activities, resulting in more diversified and less vulnerable economies. A central challenge for the Caribbean is thus to come together as a region, overcome the limitations posed by size, and garner the benefits of globalization. Efforts should build on existing regional arrangements; accelerating progress in implementing these agreements would stimulate trade. Policymakers could also promote deeper integration with Latin America and the rest of the world by pursuing new trade agreements, leveraging current agreements more effectively, or deepening them to include areas beyond traditional trade issues, and developing port and transport infrastructure.
The Macroeconomic Returns of Investment in Resilience to Natural Disasters Under Climate Change: A DSGE Approach by Emilio Fernández Corugedo,Andres Gonzalez,Mr. Alejandro D Guerson Pdf
This paper presents a Markov switching dynamic stochastic general equilibrium model designed to evaluate the macroeconomic return of adaptation investment to natural disasters (NDs) and the impact of climate change. While the model follows the existing literature in assuming that NDs destroy a share of the public and private capital stocks and a government that can invest in adaptation at an additional cost, it adds several features that are key to the analysis, both in the near (transition) and long (steady state) terms. Those include incomplete markets, financial frictions with collateral constraints, foreign remittances, full menu of tax and government spending instruments, and endogenous climate risk premium. The model is calibrated to the case of Dominica. It finds that NDs have large and persistent negative effects on output and public finances. It also shows that adaptation investment has large returns in terms of private investment, employment, output and tax revenue in the long term, especially under climate change.
Nicaragua by International Monetary Fund. Western Hemisphere Dept. Pdf
This Selected Issues paper analyzes Nicaragua’s social security system, which is projected to run out of liquid reserves by 2019, several years earlier than anticipated. To avoid burdening the budget, reforms to the system are urgently needed. A deep actuarial, economic, and operational analysis is needed to design a comprehensive reform program. Such a program must ensure that the defined-benefit, pay-as-you-go system can sustain itself for another generation of workers and that improved health care benefits can be maintained. A politically acceptable, pragmatic solution appears within reach. However, the authorities should act quickly to avoid a costly bailout of the system.
Unleashing Growth and Strengthening Resilience in the Caribbean by Mr.Krishna Srinivasan,Ms.Inci Otker,Ms.Uma Ramakrishnan,Mr.Trevor Serge Coleridge Alleyne Pdf
This book provides a diagnosis of the central economic and financial challenges facing Caribbean policymakers and offers broad policy recommendations for promoting a sustained and inclusive increase in economic well-being. The analysis highlights the need for Caribbean economies to make a concerted effort to break the feedback loops between weak macroeconomic fundamentals, notably pertaining to fiscal positions and financial sector strains, and structural impediments, such as high electricity costs, limited financial deepening, violent crime, and brain drain, which have depressed private investment and growth. A recurring theme in the book is the need for greater regional coordination in finding solutions to address the Caribbean’s shared and intertwined macroeconomic and structural challenges. The analysis suggests that strengthening regional and global market integration of Caribbean economies would provide an impetus to sustained growth in incomes and jobs. Greater regional and global economic integration would also facilitate structural transformation and a shift toward new economic activities, resulting in more diversified and less vulnerable economies. A central challenge for the Caribbean is thus to come together as a region, overcome the limitations posed by size, and garner the benefits of globalization. Efforts should build on existing regional arrangements; accelerating progress in implementing these agreements would stimulate trade. Policymakers could also promote deeper integration with Latin America and the rest of the world by pursuing new trade agreements, leveraging current agreements more effectively, or deepening them to include areas beyond traditional trade issues, and developing port and transport infrastructure.
