{
  "title": "Understanding the Macroeconomic Effects of Natural Disasters",
  "publication": "IMF Working Papers, February 21, 2025",
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  "summary": "Climate change is causing more frequent and devastating natural disasters. The goal of this paper is two-fold. First, it examines the dynamic effects of natural disasters on the growth of output and its components.",
  "sections": [
    {
      "heading": "Summary findings",
      "content": "- Climate change is causing more frequent and devastating natural disasters.\n- The paper has two main goals:\n  - Examine the dynamic effects of natural disasters on the growth of output and its components.\n  - Assess the role of pre-existing country characteristics in mitigating the adverse impact of natural disasters."
    },
    {
      "heading": "Dynamic effects on output and its components",
      "content": "- Advanced economies (AEs):\n  - Government expenditure rises immediately in the same year of the natural disaster.\n  - The rise in government expenditure offsets the decline in private investment growth.\n  - As a result, output growth in AEs is not significantly affected by natural disasters.\n- Emerging markets and developing countries (EMDEs):\n  - The increase in government expenditure after a natural disaster is smaller than in AEs.\n  - The smaller fiscal response is unable to mitigate the contemporaneous negative effect on output growth.\n  - The contemporaneous decline in output growth mainly reflects:\n    - A fall in investment in non-small-island EMDEs.\n    - A fall in net exports in small-island EMDEs.\n  - Output recovery in the subsequent year does not fully offset the decline during the year of the disaster."
    },
    {
      "heading": "Role of pre-existing country characteristics",
      "content": "- Small islands tend to experience more significant declines in output growth following a natural disaster.\n- Countries with limited pre-disaster fiscal space tend to experience more significant declines in output growth following a natural disaster."
    },
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      "content": "- Authors: Ha Nguyen, Alan Feng, Mercedes Garcia-Escribano\n- Date: February 21, 2025\n- Pages: 27\n- Series: Working Paper No. 2025/046\n- Issue: 046\n- DOI: https://doi.org/10.5089/9798229001939.001\n- ISBN: 9798229001939\n- ISSN: 1018-5941\n\nSource: https://www.imf.org/en/publications/wp/issues/2025/02/21/understanding-the-macroeconomic-effects-of-natural-disasters-562165\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2025/02/21/understanding-the-macroeconomic-effects-of-natural-disasters-562165"
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    "Authors: Ha Nguyen, Alan Feng, Mercedes Garcia-Escribano",
    "Published: February 21, 2025",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798229001939.001",
    "Climate change is causing more frequent and devastating natural disasters.",
    "The paper has two main goals:",
    "Advanced economies (AEs):",
    "Emerging markets and developing countries (EMDEs):",
    "Small islands tend to experience more significant declines in output growth following a natural disaster.",
    "Countries with limited pre-disaster fiscal space tend to experience more significant declines in output growth following a natural disaster.",
    "Authors: Ha Nguyen, Alan Feng, Mercedes Garcia-Escribano",
    "Date: February 21, 2025",
    "Pages: 27",
    "Series: Working Paper No. 2025/046",
    "Issue: 046",
    "DOI: https://doi.org/10.5089/9798229001939.001",
    "ISBN: 9798229001939",
    "ISSN: 1018-5941",
    "**Working Paper**"
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