02177cas a2200265 a 4500 AALejournalIMF015951 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513515380 1018-5941 BD-DhAAL BD-DhAAL Cantelmo, Alessandro. Macroeconomic Outcomes in Disaster-Prone Countries / Alessandro Cantelmo, Giovanni Melina, Chris Papageorgiou. Washington, D.C. : International Monetary Fund, 2019. 1 online resource (52 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Using a dynamic stochastic general equilibrium model, we study the channels through which natural disaster shocks affect macroeconomic outcomes and welfare in disaster-prone countries. We solve the model using Taylor projection, a solution method that is shown to deal effectively with high-impact weather shocks calibrated in accordance to empirical evidence. We find large and persistent effects of weather shocks that significantly impact the income convergence path of disaster-prone countries. Relative to non-disaster-prone countries, on average, these shocks cause a welfare loss equivalent to a permanent fall in consumption of 1.6 percent. Welfare gains to countries that self-finance investments in resilient public infrastructure are found to be negligible, and international aid has to be sizable to achieve significant welfare gains. In addition, it is more cost-effective for donors to contribute to the financing of resilience before the realization of disasters, rather than disbursing aid after their realization. Mode of access: Internet Melina, Giovanni. Papageorgiou, Chris. IMF Working Papers; Working Paper ; No. 2019/217 Full text available on IMF http://elibrary.imf.org/view/journals/001/2019/217/001.2019.issue-217-en.xml IMF e-Library