Economics Of Uncertainty And Disasters

Economics of Uncertainty and Disasters

Covers macroeconomic risks, rare events, and adaptive responses across disciplines.

Universidad Torcuato Di Tella

Unequal Climate Policy in an Unequal World

Elisa Belfiori

Federal Reserve Bank of Dallas

Geopolitical Oil Price Risk and Economic Fluctuations

Lutz Kilian

Monash University

Labor supply responses to rainfall shocks

Pushkar Maitra

International Monetary Fund

Changing Climate in Brazil: Key Vulnerabilities and Opportunities

Christina Kolerus

University of Gothenburg

Floods, droughts, and environmental circumscription in early state development

Ola Olsson

Overview

This theme investigates how economies respond to rare shocks — climate crises, geopolitical instability, and natural disasters — and how these disruptions reshape development, labor, and policy planning. Drawing on global research, the featured interviews explore both historical insights and forward-looking models for resilience, inequality, and environmental adaptation.

Why It Matters

Rare Events, Real Costs: Floods, oil shocks, and rainfall volatility are no longer outliers — they are central macroeconomic drivers.
Inequality Amplified: Climate and economic shocks disproportionately affect low-income populations, demanding redistributive strategies.
Policy Foresight: Macroeconomic modeling must now account for environmental constraints and systemic uncertainty.
Institutional Resilience: Adaptive capacity, both political and infrastructural, is the new currency of sustainable development.

Core Concepts

Regressive Impact of Carbon Taxes

Examines the unequal burden of climate policy on low-income households.
Analyzes redistributive potential and regressivity in environmental taxation.

Oil Market Volatility and Macro Fluctuations

Explores how geopolitical risks influence global oil markets.
Links energy shocks to broader macroeconomic instability.

Rural Labor and Rainfall Shocks

Studies how rural labor markets in developing countries respond to unpredictable weather.
Highlights income volatility and household adaptation strategies.

Climate Vulnerability and Green Transition

Examines Brazil’s exposure to climate risks.
Identifies pathways for green economic transformation in emerging economies.

Ancient Climate Shocks and Governance

Analyzes historical weather shocks and their role in early state formation.
Connects ancient environmental stressors to political centralization and territorial control.

Key Questions

Macroeconomic Fragility

How should economic models integrate climate variability and geopolitical shocks?
What does resilience look like in low- and middle-income economies?

Equity In Adaptation

Are carbon taxes fair, and how can they be restructured to protect the vulnerable?
What role should international institutions play in offsetting climate injustice?

Labor And Disasters

How do households adapt to environmental income shocks?
Can flexible labor markets compensate for ecological unpredictability?

History As Model

What can early civilizations teach us about climate governance and survival?
Are today’s disasters replaying ancient patterns in a modern key?

Suggested Use

For Economists And Policymakers

Use this guide to rethink fiscal design, labor policy, and climate mitigation strategies.

For Development Agencies

Frame resilience-building programs around historic and systemic vulnerabilities.

For Educators And Students

Ideal for courses on environmental economics, disaster risk, and global inequality.