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A methodology for incorporating natural catastrophes into macroeconomic projections

A methodology for incorporating natural catastrophes into macroeconomic projections This paper addresses a critical problem in macroeconomic planning for natural disaster losses: how to incorporate potential future losses into current planning activity. The authors develop a technique to integrate probabilistic natural hazard losses into macroeconomic planning models. Probabilistic losses to capital stock (direct losses) serve as input to a macroeconomic model, which consequently calculates the macroeconomic impacts. The macroeconomic effects calculated comprise the indirect effects of losing and not being able to replace capital stock sufficiently or in a timely manner, as well as the effects of diverting funds to relief and reconstruction activities. The modeling can serve as a tool for planning for the effects of natural disasters before they occur and for engaging in appropriate risk management activities. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Disaster Prevention and Management Emerald Publishing

A methodology for incorporating natural catastrophes into macroeconomic projections

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Publisher
Emerald Publishing
Copyright
Copyright © 2004 Emerald Group Publishing Limited. All rights reserved.
ISSN
0965-3562
DOI
10.1108/09653560410556564
Publisher site
See Article on Publisher Site

Abstract

This paper addresses a critical problem in macroeconomic planning for natural disaster losses: how to incorporate potential future losses into current planning activity. The authors develop a technique to integrate probabilistic natural hazard losses into macroeconomic planning models. Probabilistic losses to capital stock (direct losses) serve as input to a macroeconomic model, which consequently calculates the macroeconomic impacts. The macroeconomic effects calculated comprise the indirect effects of losing and not being able to replace capital stock sufficiently or in a timely manner, as well as the effects of diverting funds to relief and reconstruction activities. The modeling can serve as a tool for planning for the effects of natural disasters before they occur and for engaging in appropriate risk management activities.

Journal

Disaster Prevention and ManagementEmerald Publishing

Published: Sep 1, 2004

Keywords: Macroeconomics; Stochastic modelling; Natural disasters; Risk management

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