The economic impact of tropical cyclones: Case studies in general equilibrium

Arbeitspapier

We present a new framework for estimating the long-run economic impacts of natural disasters. Our approach combines a disaster impact model with a general equilibrium model of the economy. We apply the methodology to study the effects of tropical cyclones in the United States, the Caribbean islands, Japan, China, and the Philippines. Our results show that the post-disaster recovery after a single shock can take several decades, with notable cumulative negative effects for frequently affected regions. For instance, cyclone activity reduces long-run aggregate consumption between 0.3 - 22 %, depending on the region. To evaluate the robustness of our results, we extend the model with two additional scenarios. First, we consider endogenous economic productivity gains from specialization. Second, we add a scenario where climate change alters the intensity and frequency of future disasters. The extensions slightly modify the numerical results but do not change the qualitative conclusions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Economics Working Paper Series ; No. 23/382

Classification and Topics

• Classification: Wirtschaft ; Computational Techniques; Simulation Modeling ; Macroeconomic Analyses of Economic Development ; Climate; Natural Disasters and Their Management; Global Warming
• Subject: Tropical Cyclones ; Climate Change ; Growth ; General Equilibrium

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lehtomaa, Jere ; Renoir, Clément
• Event: Veröffentlichung
• (who): ETH Zurich, CER-ETH - Center of Economic Research
• (where): Zurich
• (when): 2023

Further information

• DOI: doi:10.3929/ethz-b-000606728
• Handle: http://hdl.handle.net/10419/283360
• Last update: 10.03.2025, 11:43 AM CET