The Increasing Pace of Weather-Related Cost Shocks: Should Net Domestic Product be Affected by Climate Disasters?

Brian Sliker and Leonard Nakamura

BEA Papers from Bureau of Economic Analysis

Abstract: The monetary costs of weather and climate disasters in the U.S. grew rapidly from 1980 to 2022, rising more than five percent in real terms annually, and implying a faster depreciation of real assets. We argue that the expected depreciation from these events could be included in consumption of fixed capital, leading to lower levels, and slightly slower growth rates, of Net Domestic Product. We use Poisson pseudo-maximum-likelihood regressions to estimate this expectation and generate our experimental measure of costs. An alternative calculation of depreciation and Net Domestic Product might be derived from the time series of costs incurred, rather than the far smoother expectation. This latter, realized series might be more appropriate for a national income satellite account. We also investigate the parametric distributions of annual average and total disaster-cost data.

JEL-codes: C82 Q54 (search for similar items in EconPapers)
Date: 2023-12
New Economics Papers: this item is included in nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.bea.gov/system/files/papers/BEA-WP2023-12.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bea:papers:0123

Access Statistics for this paper

More papers in BEA Papers from Bureau of Economic Analysis Contact information at EDIRC.
Bibliographic data for series maintained by Andrea Batch ().