Macroeconomic Modeling of Managing Hurricane Damage in the Caribbean : The Case of Jamaica
This paper describes a modeling methodology that embeds climate damages from natural disasters and risk management strategies into a macroeconomic model for Jamaica. The modeled damages take the form of capital destruction, and the risk management...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/593351609776234361/Macroeconomic-Modeling-of-Managing-Hurricane-Damage-in-the-Caribbean-The-Case-of-Jamaica http://hdl.handle.net/10986/34982 |
| Summary: | This paper describes a modeling
methodology that embeds climate damages from natural
disasters and risk management strategies into a
macroeconomic model for Jamaica. The modeled damages take
the form of capital destruction, and the risk management
strategies considered are (i) adaptation investment in
hurricane resilient infrastructure, (ii) commercial disaster
insurance for the government, (iii) the formation of a
contingency fund, and (iv) lower debt via higher future
primary balances to create fiscal space for disaster
recovery. Different risk management strategies are compared
to a baseline of no risk management. The model behavior is
estimated empirically on country-specific data. Hurricane
damage and the model results are analyzed in deterministic
and probabilistic settings, using the historical
distribution of damages for Jamaica. |
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