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Economic Resilience : Definition and Measurement / Hallegatte, Stephane
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Hallegatte, Stephane
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Climate Change Economics.
- Economic Losses.
- Economic Theory & Research.
- Environment.
- Finance and Financial Sector Development.
- Insurance & Risk Mitigation.
- Labor Policies.
- Macroeconomics and Economic Growth.
- Natural Disaster.
- Natural Disasters.
- Resilience.
- Social Protections and Labor.
- Welfare.
- Local Subjects:
- Climate Change Economics.
- Economic Losses.
- Economic Theory & Research.
- Environment.
- Finance and Financial Sector Development.
- Insurance & Risk Mitigation.
- Labor Policies.
- Macroeconomics and Economic Growth.
- Natural Disaster.
- Natural Disasters.
- Resilience.
- Social Protections and Labor.
- Welfare.
- Physical Description:
- 1 online resource (46 pages)
- Other Title:
- Economic Resilience
- Place of Publication:
- Washington, D.C., The World Bank, 2014
- System Details:
- data file
- Summary:
- The welfare impact of a disaster does not only depend on the physical characteristics of the event or its direct impacts in terms of lost lives and assets. Welfare impacts also depend on the ability of the economy to cope, recover, and reconstruct and therefore to minimize aggregate consumption losses. This ability can be referred to as the macroeconomic resilience to natural disasters. Macroeconomic resilience has two components: instantaneous resilience, which is the ability to limit the magnitude of immediate production losses for a given amount of asset losses, and dynamic resilience, which is the ability to reconstruct and recover. Welfare impacts also depend on micro-economic resilience, which depends on the distribution of losses; on households' vulnerability, such as their pre-disaster income and ability to smooth shocks over time with savings, borrowing, and insurance, and on the social protection system, or the mechanisms for sharing risks across the population. The (economic) welfare disaster risk in a country can be reduced by reducing the exposure or vulnerability of people and assets (reducing asset losses), increasing macroeconomic resilience (reducing aggregate consumption losses for a given level of asset losses), or increasing microeconomic resilience (reducing welfare losses for a given level of aggregate consumption losses). The paper proposes rules of thumb to estimate macroeconomic and microeconomic resilience based on the relevant parameters in the economy. It also provides a toolbox of policies to increase macro- or micro-economic resilience and a list of indicators that can be used to build a resilience indicator.
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