Economics of disasters and climate change最新文献

Eastern Caribbean Small Island Developing States (SIDS) have a high dependence on international trade for income, employment, and poverty reduction given their extreme openness, small market size, narrow range of resources, and productive capabilities and specialized economic structures. These features make them vulnerable to external shocks, the most frequent being tropical storms. The objective of this paper is to investigate the impact of tropical storms on international trade for 8 Eastern Caribbean SIDS over the period 2000-2019, as well as the mediating role of the Real Effective Exchange Rate (REER). The paper uses panel regression techniques along with mediation analysis applied to monthly export, import, and exchange rate data taken from the Eastern Caribbean Central Bank combined with a measure of hurricane destruction that accounts for ex-ante economic exposure to damage. The results indicate that hurricanes reduce exports of goods by 20 percent in the month of a strike and up to three months thereafter. The impact on imports is more immediate and less severe, reducing imports of goods by 11 per cent only in the month of a strike. The mediation analysis suggests that the REER plays no mediation role in explaining the impact of tropical storm damage on exports and imports in the region.

Fiscal resilience against disasters is vital for the recovery in the aftermath of climate hazards. Without swift access to available funds for disaster relief, damages to human and the economy would be further exacerbated. How insurance may influence fiscal performance over time and can increase fiscal resilience for today and under a future climate has not been looked at yet in detail. Focusing on the Caribbean region and on the fiscal performance of governments after disaster events, we empirically analyze the effectiveness of the Caribbean Catastrophe Risk Insurance Facility (CCRIF) regarding the reduction of short-term fiscal effects. We embed this analysis within a novel climate impact storyline approach where we produce past plausible events and investigate the usefulness of insurance under such events. The storylines were modified according to global and climate change related boundary conditions to address the issue whether the CCRIF is fit for purpose or will need to be adapted in the future. We found that both hurricane strikes and the CCRIF affect fiscal outcomes of Caribbean countries. Furthermore, there are indications that CCRIF can counteract the negative fiscal consequences over the short term period induced by the disaster. Our analysis should shed some light on the current discussions on how development related assistance can be structured to enhance climate resilience in highly exposed countries for both direct and fiscal impacts of disasters.

Supplementary information: The online version contains supplementary material available at 10.1007/s41885-023-00126-0.

Prior to the appearance of the Omicron variant, observations on countries like the UK that have accumulated a large fraction of inoculated individuals suggest that, although initially, vaccines have little effect on new infections, they strongly reduce the share of mortality out of a given pool of infections. This paper examines the extent to which this phenomenon is more general by testing the hypothesis that the ratio of lagged mortality to current infections is decreasing in the total number of vaccines per one hundred individuals in the pre-Omicron period, in a pooled time-series, cross-section sample with weekly observations for up to 208 countries. The main finding is that vaccines moderate the share of mortality from a given pool of lagged infections at sufficiently high levels of vaccination rates, which is essentially a favorable shift in the tradeoff between life preservation and economic performance. The practical lesson is that, in the presence of a sufficiently high share of inoculated individuals, governments can shade down containment measures, even as infections are still rampant, without significant adverse effects on mortality.

This paper argues that the type of COVID-19 containment measures affects the trade-offs between infection cases, economic activity and sovereign risk. Using local projection methods and a year and a half of high-frequency daily data covering 44 advanced and emerging economies, we find that smart (e.g. testing) as opposed to physical (e.g. lockdown) measures appear to be best placed to tackle these trade-offs. Initial conditions also matter whereby containment measures can be less disruptive when public health response time is fast and public debt is low. We also construct a database of daily fiscal announcements for Euro area countries, and find that sovereign risk is improved under a combination of large support packages and smart measures.