Natural Disasters and Macroeconomic Performance

Strulik, Holger; Trimborn, Timo

doi:10.1007/s10640-018-0239-7

Cited by 24 publications

(11 citation statements)

References 49 publications

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“…Little evidence is found for the accumulation of human capital by meteorological disasters, but geological disasters are shown to have negative impact on human capital accumulation. [32] point out that although natural disasters lead to considerable welfare losses, disasters are shown to have no significant impact on per capita GDP.…”

Section: Literature Reviewmentioning

confidence: 99%

Natural disasters, climate change, and their impact on inclusive wealth in G20 countries

Fang

Lau

et al. 2018

Environ Sci Pollut Res

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This paper uses the 1990-2010 natural disaster and carbon emissions data of G20 countries to examine the impact of natural disasters and climate change on the natural capital component of inclusive wealth. Our study shows that climate change and GDP have no positive impacts on the growth of natural capital. By contrast, trade openness and natural disaster frequency contribute to the accumulation of natural capital in G20 countries. There is an inverted U-shaped relationship between the growth of natural capital and the magnitude of natural disaster. Natural capital growth is not affected very much by small disasters. By contrast, large disasters tend to make the growth of natural capital fall sharply.

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Section: Literature Reviewmentioning

confidence: 99%

Natural disasters, climate change, and their impact on inclusive wealth in G20 countries

Fang

Lau

et al. 2018

Environ Sci Pollut Res

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“…We compute the distribution of losses and their dynamics over time across sectors at a higher level of detail than previous studies. Models featuring endogenous dynamics such as CGE models, even though they depict up to 35 industry sectors as in [30], typically are comparative static CGE models 10 [30-32], while fully dynamic CGE models usually depict only one output good as in [29]. Furthermore, they often are confined to regions smaller than a national economy [31,32].…”

Section: Discussionmentioning

confidence: 99%

“…Indirect economic effects from natural disasters are difficult to model with traditional approaches such as inputoutput (IO) models [22][23][24][25][26][27][28], computable general equilibrium (CGE) models [29][30][31][32][33][34], and econometric analyses [7][8][9][10][11][12][13][14][15][16][17][18][19]35] because of the over-simplifying nature of these approaches [36]. IO models have a tendency to overestimate indirect economic losses and gains [2].…”

Section: Introductionmentioning

confidence: 99%

When does a disaster become a systemic event? Estimating indirect economic losses from natural disasters

Poledna,

Hochrainer-Stigler,

Miess

et al. 2018

Preprint

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Reliable estimates of indirect economic losses arising from natural disasters are currently out of scientific reach. To address this problem, we propose a novel approach that combines a probabilistic physical damage catastrophe model with a new generation of macroeconomic agent-based models (ABMs). The ABM moves beyond the state of the art by exploiting large data sets from detailed national accounts, census data, and business information, etc., to simulate interactions of millions of agents representing each natural person or legal entity in a national economy. The catastrophe model introduces a copula approach to assess flood losses, considering spatial dependencies of the flood hazard. These loss estimates are used in a damage scenario generator that provides input for the ABM, which then estimates indirect economic losses due to the event. For the first time, we are able to link environmental and economic processes in a computer simulation at this level of detail. We show that moderate disasters induce comparably small but positive short-to medium-term, and negative long-term economic impacts. Large-scale events, however, trigger a pronounced negative economic response immediately after the event and in the long term, while exhibiting a temporary short-to medium-term economic boost. We identify winners and losers in different economic sectors, including the fiscal consequences for the government. We quantify the critical disaster size beyond which the resilience of an economy to rebuild reaches its limits. Our results might be relevant for the management of the consequences of systemic events due to climate change and other disasters.

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“…Gross domestic product (GDP) is often used to quantify the indirect economic impact of disasters (Botzen et al 2019). Based on previous studies, disasters can have varying effects-both positive and negative-on GDP (Chhibber and Laajaj 2008;Panwar and Sen 2019;Strulik and Trimborn 2019). If a disaster causes severe damage, GDP tends to decrease; however, if the damage from a disaster is minor, GDP tends to increase (Chhibber and Laajaj 2008).…”

Section: Introductionmentioning

confidence: 99%

“…If a disaster causes severe damage, GDP tends to decrease; however, if the damage from a disaster is minor, GDP tends to increase (Chhibber and Laajaj 2008). Strulik and Trimborn (2019) found that the effects of disasters on GDP depend on a community's welfare spending. If a disaster occurs in a country with high welfare spending, GDP may grow as a result of citizens' increasing consumption to replace assets that were destroyed.…”

Section: Introductionmentioning

confidence: 99%

Are Disasters a Risk to Regional Fiscal Balance? Evidence from Indonesia

Wiyanti

Halimatussadiah

2021

Int J Disaster Risk Sci

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Indonesia is an archipelago country and is fairly vulnerable to disasters. While disasters generally affect government revenue and expenditure, their effects likely vary by country. This study examines the effect of disasters on the fiscal balance, revenue, and expenditure of local governments. We used panel data and fixed effects methods to estimate the degree to which disaster severity influences budgetary solvency at the district and provincial levels in Indonesia between 2010 and 2018. This study revealed that disasters can strain fiscal balance at the district and provincial levels due to a decrease in own-source revenue and an increase in social assistance expenditure, capital expenditure, consumption expenditure, and unexpected expenditure. The district expenditure most threatened by disasters is consumption expenditure, while the provincial expenditure most threatened is unexpected expenditure. We also found that an increase in capital expenditure can lead to financial burden due to delays of planned projects or post-disaster reconstruction. Based on these findings, it is clear that some forms of insurance or other financing schemes are necessary to mitigate the adverse impacts of disasters on regional fiscal balance.

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Natural Disasters and Macroeconomic Performance

Cited by 24 publications

References 49 publications

Natural disasters, climate change, and their impact on inclusive wealth in G20 countries

Natural disasters, climate change, and their impact on inclusive wealth in G20 countries

When does a disaster become a systemic event? Estimating indirect economic losses from natural disasters

Are Disasters a Risk to Regional Fiscal Balance? Evidence from Indonesia

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