Impacts of Natural Disasters on a Dynamic Economy

Andreas Groth (), Patrice Dumas (), Michael Ghil () and Stephane Hallegatte
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Andreas Groth: CERES-ERTI - Centre d'Enseignement et de Recherche sur l'Environnement et la Societé / Environmental Research and Teaching Institute - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres, LMD - Laboratoire de Météorologie Dynamique (UMR 8539) - UPMC - Université Pierre et Marie Curie - Paris 6 - INSU - CNRS - Institut national des sciences de l'Univers - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - Département des Géosciences - ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres, UCLA - University of California [Los Angeles] - UC - University of California
Patrice Dumas: CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, CERES-ERTI - Centre d'Enseignement et de Recherche sur l'Environnement et la Societé / Environmental Research and Teaching Institute - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres, Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement
Michael Ghil: LMD - Laboratoire de Météorologie Dynamique (UMR 8539) - UPMC - Université Pierre et Marie Curie - Paris 6 - INSU - CNRS - Institut national des sciences de l'Univers - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - Département des Géosciences - ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres, IGPP - Institute of Geophysics and Planetary Physics [Los Angeles] - UCLA - University of California [Los Angeles] - UC - University of California

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Abstract: 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 socioeconomic 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 nonequilibrium 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.

Keywords: Nonequilibrium modeling; Vulnerability paradox; Multivariate singular spectrum analysis; Macroeconomic dynamics; Business cycle; Vulnerabiity paradox; Business cycle; Nonlinear fluctuation dissipation (search for similar items in EconPapers)
Date: 2015
Note: View the original document on HAL open archive server: https://enpc.hal.science/hal-01678074v1
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Published in Mario Chavez, Michael Ghil, Jaime Urrutia-Fucugauchi. Extreme Events: Observations, Modeling, and Economics, Wiley, pp.343-360, 2015, Geophysical Monograph Series, 978-1-119-15701-4. ⟨10.1002/9781119157052.ch19⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01678074

DOI: 10.1002/9781119157052.ch19

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