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dc.titleMacroeconomic Fluctuations Under Natural Disaster Shocks in Central America and the Caribbean
dc.contributor.authorWright, Allan
dc.contributor.authorBorda, Patrice
dc.contributor.orgunitCountry Department Caribbean Group
dc.coverageHonduras
dc.coverageGuatemala
dc.coverageEl Salvador
dc.coverageCosta Rica
dc.coverageBarbados
dc.coverageBelize
dc.coverageTrinidad and Tobago
dc.coveragePanama
dc.coverageJamaica
dc.coverageNicaragua
dc.coverageThe Caribbean
dc.coverageCentral America
dc.date.available2016-12-21T00:00:00
dc.date.issue2016-12-21T00:00:00
dc.description.abstractThis paper examines the role of disaster shock in a one-sector, representative agent dynamic stochastic general equilibrium model (DSGE). First, it estimates a panel vector autoregresive (VAR) model for output, investment, trade balance, consumption, and country spread to capture the economic effects of output, country risk, and exogenous natural disaster shocks. The study determines the empirical dynamic responses of ten Caribbean countries and seven countries in Central America. Second, by taking into account rare events and trend shocks, this paper also provides a baseline framework of the dynamic interactions between the macroeconomic effects of rare events and financial friction for two specific countries: Barbados and Belize. Similar findings between empirical and general frameworks show that disaster shocks in Central America and the Caribbean have only a significative impact in the short-run regional business cycle. The findings show that Caribbean countries are better prepared for natural disaster shocks.
dc.format.extent41
dc.identifier.doihttp://dx.doi.org/10.18235/0011778
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Macroeconomic-Fluctuations-Under-Natural-Disaster-Shocks-in-Central-America-and-the-Caribbean.pdf
dc.language.isoen
dc.mediumAdobe PDF
dc.publisherInter-American Development Bank
dc.subjectNatural Disaster
dc.subjectProductivity Shock
dc.subjectMacroeconomy
dc.subjectInvestment Level
dc.subjectFinancial Friction
dc.subjectEconomic Impact
dc.subjectTrade Balance
dc.subject.jelcodeE32 - Business Fluctuations • Cycles
dc.subject.jelcodeF41 - Open Economy Macroeconomics
dc.subject.keywordstrade balance;macroeconomic fluctuations;productivity shock;natural disaster shocks
dc.typeWorking Papers
idb.identifier.pubnumberWorking Papers
idb.operationRG-P1677
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