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Disaster risk from a macroeconomic perspective: a metric for fiscal vulnerability evaluation
Author(s) -
Cardona Omar D.,
Ordaz Mario G.,
Marulanda Mabel C.,
Carreño Martha L.,
Barbat Alex H.
Publication year - 2010
Publication title -
disasters
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.744
H-Index - 70
eISSN - 1467-7717
pISSN - 0361-3666
DOI - 10.1111/j.1467-7717.2010.01183.x
Subject(s) - vulnerability (computing) , resilience (materials science) , actuarial science , business , poison control , metric (unit) , risk management , psychological resilience , economics , economic model , finance , operations management , computer science , macroeconomics , computer security , medicine , medical emergency , psychology , physics , psychotherapist , thermodynamics
The Disaster Deficit Index (DDI) measures macroeconomic and financial risk in a country according to possible catastrophic scenario events. Extreme disasters can generate financial deficit due to sudden and elevated need of resources to restore affected inventories. The DDI captures the relationship between the economic loss that a country could experience when a catastrophic event occurs and the availability of funds to address the situation. The proposed model utilises the procedures of the insurance industry in establishing probable losses, based on critical impacts during a given period of exposure; for economic resilience, the model allows one to calculate the country's financial ability to cope with a critical impact. There are limitations and costs associated with access to resources that one must consider as feasible values according to the country's macroeconomic and financial conditions. This paper presents the DDI model and the results of its application to 19 countries of the Americas and aims to guide governmental decision‐making in disaster risk reduction.