The unlikeliness of an economic catastrophe: Localization & globalization

Arbeitspapier

This paper attempts to show why it is highly unlikely that a disaster can become a catastrophe. We first put forward an economic concept of disaster localization. This shows that a localized disaster is unlikely to affect the macro economy in any significant way and that economic development itself tends to make most disasters localized as an incidental consequence of its endogenous processes. We then show that the effect of current globalization on vulnerability seems to be double-edged. It may increase local vulnerability by disenfranchising communities and adding new sources of economic instability. But it may also speed up the downgrading of vulnerability at the national level by contributing to upgrade localization, further reducing the possibility of a catastrophe. It is therefore, difficult to imagine a realistic scenario in which a disaster could become catastrophic, even less so in developed countries.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 576

Classification and Topics

• Classification: Wirtschaft ; Macroeconomic Analyses of Economic Development ; Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance ; International Linkages to Development; Role of International Organizations ; Empirical Studies of Trade
• Subject: Catastrophe, Disaster escalation, Localization, Globalization, Vulnerability

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Albala-Bertrand, Jose Miguel
• Event: Veröffentlichung
• (who): Queen Mary University of London, Department of Economics
• (where): London
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/62907
• Last update: 10.03.2025, 11:42 AM CET