BACKGROUND
Beyond the human tragedy that natural events generate, they have severe impacts on economic growth. They not only destroy the acquis of residential capital, infrastructure and the functioning of public services, but they also endanger future investment flows, taking long-term financial and budgetary implications.
Natural events affect production factors, employment, the composition of investment and even the distribution of income, thus jeopardizing the economy's capacity to generate goods and services (although there is some debate about their short and long-term effects on growth, there is no doubt about their adverse impact on wealth and well-being).
A disaster due to the occurrence of natural events, which uncovers the existing vulnerability conditions, is an adverse shock of large proportions that affects productivity, development and the fight against poverty. Thus, understanding the policy implications and the costs associated with these eventualities is a necessity of the first order.
This activity aims to measure the impacts of disasters due to the occurrence of natural events on the economic activity and public expenditure over the last few years in Latin America and the Caribbean. To do so, the participants will resort to an analysis of time series that allows for drawing the predicted path of income versus the observed path. This factual analysis allows for quantifying the macroeconomic impact of disasters.
This activity also intends to review the series of policies that would help mitigate such adverse effects and assess policy implications. Of course, any analysis of this type should take into account the fact that these disasters have local and global dimensions that condition the strategy for risk management.
In this regard, the impact of direct or indirect effects depends not only on the severity of the natural disaster, but also on the size of the economy and other more idiosyncratic conditions that finally determine the magnitude of the costs and that have helped identify a number of typologies that should be considered.
