This dissertation deals with the macroeconomic effects of natural disasters - with an emphasis on floods. The paper includes an overview of literature on this topic and an explanation of the main macroeconomic mechanisms that determine the short-term and long-term movement of the gross domestic product after a natural disaster.
Most studies discover that the macroeconomic effects of such events are negative, but a positive impact is not excluded. The reason for this can be reconstruction activities after the disaster, serving as as a short-term stimulus to the economy. In developing countries that are heavily linked to agriculture, the impact of floods on growth can be positive due to an improved productivity of land. In order to reduce the negative consequences, a capacity for reconstruction is crucial both at the level of households and at the state level.
The second part of this paper analyzes the potential impact of slovenian floods in 2010 on macroeconomic indicators. The variations of the gross domestic product, the construction sector as well as government and household expenditure do not indicate any obvious deviations that could be attributed to the consequences of the flood event. In conclusion, the dissertation touches on the urgency of flood protection and the bad situation in Slovenia in this field.
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