An Exploration of the Link between Development, Economic Growth, and Natural Risk

This paper investigates the link between development, economic growth, and the economic losses from natural disasters in a normative analytical framework with an illustration on hurricane flood risks in New Orleans. It concludes that under broad conditions it is optimal for (1) the probability of di...

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Main Author:	Hallegatte, Stéphane
Format:	Working Paper
Language:	en_US
Published:	World Bank, Washington, DC 2013
Subjects:	development economic growth risk natural disaster economic losses optimality capital accumulation production function suboptimal behaviors
Online Access:	http://hdl.handle.net/10986/16372

id	okr-10986-16372
recordtype	oai_dc
spelling	okr-10986-163722021-04-23T14:03:28Z An Exploration of the Link between Development, Economic Growth, and Natural Risk Hallegatte, Stéphane development economic growth risk natural disaster economic losses optimality capital accumulation production function suboptimal behaviors This paper investigates the link between development, economic growth, and the economic losses from natural disasters in a normative analytical framework with an illustration on hurricane flood risks in New Orleans. It concludes that under broad conditions it is optimal for (1) the probability of disaster occurrence to decrease with income; (2) the capital at risk—and thus the economic losses in case of disaster — to increase faster than economic growth; and (3) the average annual losses to grow faster than income at low levels of development and slower than income at high levels of development. Increasing risk-taking reinforces economic growth; improving protections transfers risks from frequent low-intensity events to rare high-impact events. 2013-12-06T16:47:08Z 2013-12-06T16:47:08Z 2013-05-05 http://hdl.handle.net/10986/16372 en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research :: Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	development economic growth risk natural disaster economic losses optimality capital accumulation production function suboptimal behaviors
spellingShingle	development economic growth risk natural disaster economic losses optimality capital accumulation production function suboptimal behaviors Hallegatte, Stéphane An Exploration of the Link between Development, Economic Growth, and Natural Risk
description	This paper investigates the link between development, economic growth, and the economic losses from natural disasters in a normative analytical framework with an illustration on hurricane flood risks in New Orleans. It concludes that under broad conditions it is optimal for (1) the probability of disaster occurrence to decrease with income; (2) the capital at risk—and thus the economic losses in case of disaster — to increase faster than economic growth; and (3) the average annual losses to grow faster than income at low levels of development and slower than income at high levels of development. Increasing risk-taking reinforces economic growth; improving protections transfers risks from frequent low-intensity events to rare high-impact events.
format	Publications & Research :: Working Paper
author	Hallegatte, Stéphane
author_facet	Hallegatte, Stéphane
author_sort	Hallegatte, Stéphane
title	An Exploration of the Link between Development, Economic Growth, and Natural Risk
title_short	An Exploration of the Link between Development, Economic Growth, and Natural Risk
title_full	An Exploration of the Link between Development, Economic Growth, and Natural Risk
title_fullStr	An Exploration of the Link between Development, Economic Growth, and Natural Risk
title_full_unstemmed	An Exploration of the Link between Development, Economic Growth, and Natural Risk
title_sort	exploration of the link between development, economic growth, and natural risk
publisher	World Bank, Washington, DC
publishDate	2013
url	http://hdl.handle.net/10986/16372
_version_	1764433001545990144

An Exploration of the Link between Development, Economic Growth, and Natural Risk

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