Natural Disasters, Cascading Losses, and Economic Complexity: A Multi-layer Behavioral Network Approach

Asjad Naqvi () and Irene Monasterolo ()

No 24, Ecological Economic Papers from WU Vienna University of Economics and Business

Abstract: Assessing the short-term socio-economic impacts of climate-led disasters on food trade networks requires new bottom-up models and vulnerability metrics rooted in complexity theory. Indeed, such shocks could generate cascading socio-economic losses across the networks layers where emerging agents¿ responses could trigger tipping points. We contribute to address this research gap by developing a multi-layer behavioral network methodology composed of multiple spatially-explicit layers populated by heterogeneous interacting agents. Then, by introducing a new multi-layer risk measure called vulnerability rank, or VRank, we quantify the stress in the aftermath of a shock. Our approach allows us to analyze both the supply- and the demand-side dimensions of the shock by quantifying short-term behavioral responses, the transmission channels across the layers, the conditions for reaching tipping points, and the feedback on macroeconomic indicators. By simulating a stylized two-layer supply-side production and demand-side household network model we find that, (i) socio-economic vulnerability to climate-led disasters is cyclical, (ii) the distribution of shocks depends critically on the network structure, and on the speed of supply-side and demand-side responses. Our results suggest that such a multi-layer framework could provide a comprehensive picture of how climate-led shocks cascade and how indirect losses can be measured. This is crucial to inform effective post-disaster policies aimed to build food trade network resilience to climate-led shocks, in particular in more agriculture-dependent bread-basket regions.

Keywords: complexity economics; multi-layer networks; behavioral economics; food trade; climate-led shocks; vulnerability rank; post-disaster policy (search for similar items in EconPapers)
Date: 2019-04
New Economics Papers: this item is included in nep-agr, nep-env and nep-hme
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://epub.wu.ac.at/6914/ original version (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden (https://epub.wu.ac.at/6914/ [308 PERMANENT REDIRECT]--> https://epub.wu.ac.at/id/eprint/6914 [302 FOUND]--> https://research.wu.ac.at/en/publications/7b0a2cf0-6498-4265-95b0-bc21d2836f58)

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:wiw:wus045:6914

Access Statistics for this paper

More papers in Ecological Economic Papers from WU Vienna University of Economics and Business Welthandelsplatz 1, 1020 Vienna, Austria.
Bibliographic data for series maintained by WU Library ().