A New Model to Evaluate the Economic Effects of Floods and its Application to China
FUDAN Journal of Humanities and Social Sciences, 9(4): 627–641
Posted: 13 Jul 2016 Last revised: 24 Nov 2016
Date Written: July 13, 2016
We set forth the macroeconomics evaluation of floods (MEF) model, a new model to assess and evaluate the impact of floods on GNP growth. This model points to a new, more concrete approach to measure the economic impact of floods. Up to now, the measurement has been subject to a great deal of uncertainty. The main contribution of the model is to significantly reduce this uncertainty by measuring the impact with four well-defined, economically intuitive indicators. To illuminate and demonstrate its promise, we employ the model to evaluate and analyze the impact of two major floods on the economy of the People’s Republic of China. Our MEF-Model analysis indicates that the floods of Zhangshu and Jiangxi in 2010 caused greater economic damage than the floods of Central South China in 1931. Going forward, MEF-Model simulations are a valuable tool for estimating the effect of potential future floods in the PRC and elsewhere.
Keywords: Floods, economic impact, economic evaluation, MEF-model, China
JEL Classification: Q54, O40
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