Assessing the Macroeconomic Impacts of Natural Disasters : Are there Any?
There 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 sig...
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090618131707 http://hdl.handle.net/10986/4162 |
| Summary: | There 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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