Seminars & webinars
15 November 2012

Impacts of Natural Disasters on a Dynamic Economy


Where: Milan
Location:

Fondazione Eni Enrico Mattei
Corso Magenta 63
20123 Milan

***
Video-conference
at FEEM Venice

How to reach: Google map
Event's Timetable:


h. 12.00 Seminar

Information:

Seminars Office, seminars@feem.it

Speakers:

Michael Ghil, Ecole Normale Supérieure, Paris, and University of California, Los Angeles

Abstract

Authors: Michael Ghil (ENS and UCLA), Patrice Dumas (CIRED), Andreas Groth (ENS), and Stéphane Hallegatte (CIRED and World Bank)

This paper presents a modeling framework for macroeconomic growth dynamics; it is motivated by recent attempts to formulate and study “integrated models" of the coupling between natural and socio-economic phenomena. The challenge is to describe the interfaces between human activities and the functioning of the earth system.

We examine the way that this interface works in the presence of endogenous business cycle dynamics, based on a non-equilibrium dynamic model. Recent findings about the macroeconomic response to natural disasters in such a non-equilibrium setting have shown a more severe response to natural disasters during expansions than during recessions. These findings raise questions about the assessment of climate change damages or natural disaster losses that are based purely on long-term growth models.

In order to compare the theoretical findings with observational data, we analyze cyclic behavior in the U.S. economy, based on multivariate singular spectrum analysis. We analyze a total of nine aggregate indicators in a 52-year interval (1954--2005) and demonstrate that the behavior of the U.S. economy changes significantly between intervals of growth and recession, with higher volatility during expansions.

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Impacts of Natural Disasters on a Dynamic Economy

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