Macroeconomic Risk Management Against Natural Disasters: Analysis focussed on governments in developing countries

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Springer Science & Business Media, Dec 14, 2007 - Business & Economics - 203 pages
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Looking back in history, we conceive the twentieth century as the century of wars. Most Hkely, we will conceive the twenty-first century as the century of (natural) catastrophes. Wars can be avoided (unfortunately, it did not happen often in history), in contrast, most natural disasters are outside human influence. However, the consequences of disasters can be alleviated by means of risk management. For an effective risk management, information is needed about (i) the size of the risk (measured by the frequency and intensity of the hazard), and (ii) the degree of vulnerability of the economy and society. Stefan Hochr- ner's thesis deals with measuring and modehng of both. While the physical risk modeUng is a well developed area within statistical modeling (frequency analysis, point processes, extreme value theory, etc. ), estimating the economic consequences is a more challenging task. The author studies economic effects of catastrophes by statistical analysis of mac- economic data. One interesting finding is that disasters can decrease the absolute level of economic performance, such as the GDP, while keeping growth levels nearly the same (at least after some years) as in the pre-disaster years. The boom of new products in the financial markets, especially of new derivative instru ments, has led to new risk hedging instruments such as catastrophe bonds. CAT-bonds transfer the risk to the market of investors.
 

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Contents

Introduction
1
Natural disaster risk
9
List of Figures
22
List of Tables
23
Economic impacts Statistical analysis 29
28
Natural disaster risk management measures
65
Financial resilience of the public sector
81
Catastrophe modeling and simulation
105
Case Studies
145
Conclusion and future work
169
Literature
175
Appendix
191
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About the author (2007)

Dr. Stefan Hochrainer promovierte bei o. Prof. Dr. Georg Pflug am Institut für Statistik und Decision Support Systems der Universität Wien. Er ist am International Institute for Applied System Analysis (IIASA), Laxenburg, tätig.

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