## Natural Disasters and Scarring Effects

_IMF Working Papers, December 16, 2022_

## Source details

**Canonical URL:** [Natural Disasters and Scarring Effects](https://www.imf.org/en/publications/wp/issues/2022/12/16/natural-disasters-and-scarring-effects-527014)

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- [Markdown version](/en/publications/wp/issues/2022/12/16/natural-disasters-and-scarring-effects-527014/index.md)
- [Structured JSON version](/en/publications/wp/issues/2022/12/16/natural-disasters-and-scarring-effects-527014/index.json)
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## Bibliographic details
- Authors: Weicheng Lian, Jose Ramon Moran, Raadhika Vishvesh
- Published: December 16, 2022
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400227172.001

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### Overview
- Paper title: Natural Disasters and Scarring Effects
- Authors: Weicheng Lian, Jose Ramon Moran, Raadhika Vishvesh
- Date: December 16, 2022
- Core focus: Exploring medium-term scarring from natural disasters for countries vulnerable to climate change, with emphasis on severe shocks and regions such as the Caribbean.

### Methodology
- Empirical approach: Follows the literature on hysteresis.
- Identification strategy: Quantifies dynamic effects of natural disasters on real GDP per capita using a synthetic control approach (SCA).
- Scope: Large number of disaster episodes; focus on severe shocks.

### Key Findings
- Persistent output deviations:
  - A persistently large deviation of real GDP per capita from the counterfactual trend exists five years after a severe shock in many countries.
- Vulnerable country emphasis:
  - Findings highlight countries vulnerable to climate change, including those in the Caribbean region, as particularly at risk of medium-term scarring.
- Implication of severity:
  - The analysis concentrates on severe shocks to identify medium-term scarring effects.

### Policy Implications and Recommendations
- Urgency of resilience:
  - The findings highlight the importance and urgency of building ex-ante resilience to avoid scarring effects for countries prone to natural disasters.
- Targeting:
  - Policy attention is implied for regions and countries identified as vulnerable to climate change, such as the Caribbean, to reduce the likelihood and magnitude of medium-term scarring.

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## Content in this bundle

- **Working Paper**
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_Source: https://www.imf.org/en/publications/wp/issues/2022/12/16/natural-disasters-and-scarring-effects-527014_