Open AccessCatastrophe Finance: An Emerging Discipline
Author(s) -
Elsner James B.,
Burch R. King,
Jagger Thomas H.
Publication year - 2009
Publication title -
eos, transactions american geophysical union
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.316
H-Index - 86
eISSN - 2324-9250
pISSN - 0096-3941
DOI - 10.1029/2009eo330001
Subject(s) - natural disaster , finance , financial market , business , financial crisis , natural (archaeology) , financial risk , economics , geography , meteorology , archaeology , macroeconomics
While the recent disasters in the world's financial markets demonstrate that finance theory remains far from perfected, science also faces steep challenges in the quest to predict and manage the effects of natural disasters. Worldwide, as many as half a million people have died in disasters such as earthquakes, tsunamis, and tropical cyclones since the turn of the 21st century [ Wirtz, 2008]. Further, natural disasters can lead to extreme financial losses, and independent financial collapses can be exacerbated by natural disasters. In financial cost, 2008 was the second most expensive year on record for such catastrophes and for financial market declines. These extreme events in the natural and financial realms push the issue of risk management to the fore, expose the deficiencies of existing knowledge and practice, and suggest that progress requires further research and training at the graduate level.