Enhancing Macroeconomic Resilience to Natural Disasters and Climate Change in the Small States of the Pacific

18 Pages Posted: 3 May 2019

See all articles by Ezequiel Cabezon

Ezequiel Cabezon

University of North Carolina (UNC) at Chapel Hill

Leni Hunter

International Monetary Fund (IMF)

Patrizia Tumbarello

International Monetary Fund (IMF) Asia and Pacific Department

Kazuaki Washimi

International Monetary Fund (IMF)

Yiqun Wu

International Monetary Fund (IMF)

Date Written: May 2019

Abstract

Natural disasters and climate change are interrelated macro‐critical issues affecting all Pacific small states to varying degrees. In addition to their devastating human costs, these events damage growth prospects and worsen countries’ fiscal positions. This is the first cross‐country International Monetary Fund (IMF) study assessing the impact of natural disasters on growth in the Pacific islands as a group. A panel Vector Autoregressive (VAR) analysis suggests that, for damage and losses equivalent to 1 per cent of GDP, growth drops by 0.7 percentage points in the year of the disaster. The paper also discusses a multi‐pillar framework to enhance resilience to natural disasters at the national, regional, and multilateral levels and the importance of enhancing countries’ risk management capacities. It highlights how this approach can provide a more strategic and less ad hoc framework for strengthening both ex ante and ex post resilience and what role the IMF can play.

Suggested Citation

Cabezon, Ezequiel and Hunter, Leni and Tumbarello, Patrizia and Washimi, Kazuaki and Wu, Yiqun, Enhancing Macroeconomic Resilience to Natural Disasters and Climate Change in the Small States of the Pacific (May 2019). Asian‐Pacific Economic Literature, Vol. 33, Issue 1, pp. 113-130, 2019. Available at SSRN: https://ssrn.com/abstract=3381862 or http://dx.doi.org/10.1111/apel.12255

Ezequiel Cabezon (Contact Author)

University of North Carolina (UNC) at Chapel Hill ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

Leni Hunter

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Patrizia Tumbarello

International Monetary Fund (IMF) Asia and Pacific Department ( email )

700 19th St. NW
Washington, DC 20431
United States

Kazuaki Washimi

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Yiqun Wu

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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