The Macroeconomic Returns of Investment in Resilience to Natural Disasters Under Climate Change: A DSGE Approach PDF Download
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Author: Emilio Fernández Corugedo
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 49
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Book Description
This paper presents a Markov switching dynamic stochastic general equilibrium model designed to evaluate the macroeconomic return of adaptation investment to natural disasters (NDs) and the impact of climate change. While the model follows the existing literature in assuming that NDs destroy a share of the public and private capital stocks and a government that can invest in adaptation at an additional cost, it adds several features that are key to the analysis, both in the near (transition) and long (steady state) terms. Those include incomplete markets, financial frictions with collateral constraints, foreign remittances, full menu of tax and government spending instruments, and endogenous climate risk premium. The model is calibrated to the case of Dominica. It finds that NDs have large and persistent negative effects on output and public finances. It also shows that adaptation investment has large returns in terms of private investment, employment, output and tax revenue in the long term, especially under climate change.
Author: Emilio Fernández Corugedo
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 49
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Book Description
This paper presents a Markov switching dynamic stochastic general equilibrium model designed to evaluate the macroeconomic return of adaptation investment to natural disasters (NDs) and the impact of climate change. While the model follows the existing literature in assuming that NDs destroy a share of the public and private capital stocks and a government that can invest in adaptation at an additional cost, it adds several features that are key to the analysis, both in the near (transition) and long (steady state) terms. Those include incomplete markets, financial frictions with collateral constraints, foreign remittances, full menu of tax and government spending instruments, and endogenous climate risk premium. The model is calibrated to the case of Dominica. It finds that NDs have large and persistent negative effects on output and public finances. It also shows that adaptation investment has large returns in terms of private investment, employment, output and tax revenue in the long term, especially under climate change.
Author: Emilio Fernandez Corugedo
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Author: Anna Ivanova
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 187
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Book Description
The analysis in the book suggests that LAC countries are facing substantial challenges related to climate change but have tools at their disposal to seize the opportunities that the climate change presents. To maximize opportunities and minimize the risks LAC countries will need to improve flexibility and adaptability of their economies. Policies aimed at supporting the reallocation of labor and capital across sectors, investing in basic skills and human capital, improving transparency and economic governance to encourage investment in technology and know-how, and creating fiscal space to manage the climate transition would help LAC countries position themselves to take advantage of the opportunities afforded by the climate transition.
Author: OECD
Publisher: OECD Publishing
ISBN: 9264367454
Category :
Languages : en
Pages : 165
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Book Description
This report identifies LAC countries’ main climate change policy priorities, which were discussed through a series of Regional Policy Dialogues and Expert Workshops and complements these with findings of recent analyses by the OECD and other international partners. It explores issues related to their implementation on climate adaptation, mitigation, and cross-cutting policy areas.
Author: International Monetary Fund. Western Hemisphere Dept.
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 22
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Book Description
Belize: Selected Issues
Author: International Monetary Fund. Western Hemisphere Dept.
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 42
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Book Description
Peru: Selected Issues
Author: International Monetary Fund. Western Hemisphere Dept.
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 115
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Book Description
Jamaica has built a strong track record of investing in institutions and prioritizing macroeconomic stability. This aided the country to adapt to the difficult global environment of the past few years. The authorities provided targeted support to the economy during the pandemic but promptly scaled it back as conditions normalized. Similarly, in the wake of the war in Ukraine, domestic food and energy prices were left to adjust to shifts in international markets while targeted support was provided to the poor. The economy is expected to continue its post-COVID recovery, with inflation returning to the central bank’s target range by end-2023. The outlook is subject to downside risks from potential new COVID waves, higher commodity prices, a global slowdown, and tighter than expected global financial conditions.
Author: Paula Beltran
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 45
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Book Description
Our work is positioned at the intersection of migration and climate change—two key forces shaping the economic outlook of many countries. The analysis explores: (i) the relative importance of origincountry vs destination-country factors in explaining migration patterns; (ii) importance of climate disasters as driver of cross-border migration; and (iii) the importance of climate-driven migration on the overall impact of climate on macroeconomic outcomes. It arrives at the following main findings. First, both origin-country and destination-country contribute to explaining migration outflows from EMDEs, although only the global shocks seem important for advanced economies. Second, climate disasters are important for explaining the origincountry migration shocks in LICs and EMDEs, are especially relevant for smaller countries, and lead to migration of both genders, albeit relatively more for males out of LICs. Third, important portion of climate’s overall impact on economic outcomes—especially agricultural GDP, remittances, and inequality—is captured via climate-driven migration. Finally, higher investment in climate-resilient infrastructure can reduce the impact of climate on cross-border migration, and thereby, result in potentially important economic gains.
Author: Mr.Alessandro Cantelmo
Publisher: International Monetary Fund
ISBN: 1513517295
Category : Nature
Languages : en
Pages : 52
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Book Description
Using a dynamic stochastic general equilibrium model, we study the channels through which natural disaster shocks affect macroeconomic outcomes and welfare in disaster-prone countries. We solve the model using Taylor projection, a solution method that is shown to deal effectively with high-impact weather shocks calibrated in accordance to empirical evidence. We find large and persistent effects of weather shocks that significantly impact the income convergence path of disaster-prone countries. Relative to non-disaster-prone countries, on average, these shocks cause a welfare loss equivalent to a permanent fall in consumption of 1.6 percent. Welfare gains to countries that self-finance investments in resilient public infrastructure are found to be negligible, and international aid has to be sizable to achieve significant welfare gains. In addition, it is more cost-effective for donors to contribute to the financing of resilience before the realization of disasters, rather than disbursing aid after their realization.
Author: Mr.Tobias Adrian
Publisher: International Monetary Fund
ISBN: 1513520741
Category : Business & Economics
Languages : en
Pages : 73
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Book Description
This paper explains specifics of stress testing at the IMF. After a brief section on the evolution of stress tests at the IMF, the paper presents the key steps of an IMF staff stress test. They are followed by a discussion on how IMF staff uses stress tests results for policy advice. The paper concludes by identifying remaining challenges to make stress tests more useful for the monitoring of financial stability and an overview of IMF staff work program in that direction. Stress tests help assess the resilience of financial systems in IMF member countries and underpin policy advice to preserve or restore financial stability. This assessment and advice are mainly provided through the Financial Sector Assessment Program (FSAP). IMF staff also provide technical assistance in stress testing to many its member countries. An IMF macroprudential stress test is a methodology to assess financial vulnerabilities that can trigger systemic risk and the need of systemwide mitigating measures. The definition of systemic risk as used by the IMF is relevant to understanding the role of its stress tests as tools for financial surveillance and the IMF’s current work program. IMF stress tests primarily apply to depository intermediaries, and, systemically important banks.
