Latin America is a tropical region prone to natural disasters; between 1970 and 2018, 2.242 natural disasters took place in the region, resulting in more than USD 320 billion in damages, 295 million affected persons and 509 thousand deaths. Building resilience and preparedness are key elements for the area's development, specifically in a context where climate change effects on natural disasters is unknown. With the aim to contribute to the Sustainable Development Goal Target 17.13 (Global Macroeconomic Stability) and the Sendai Framework Priority 2 (Strengthening disaster risk governance to manage disaster risk), this thesis aims to assess whether monetary policy in the region is effective in absorbing spillover effects of disasters on economic growth. By running a panel analysis on 27 countries in the timeframe of 1970-2018 with random effects, the results reflect that the inflation target and flexible exchange rate are not contributing to alleviate pressure the external shock puts on growth. An exception carries with countries with a low rate of Central Bank governors' irregular turnover. This indicates that the inflation targets and floating exchange rate frameworks are unable to absorb the shocks due to inefficient management, rather than incompatibility with Latin America.
Anotace v angličtině
Latin America is a tropical region prone to natural disasters; between 1970 and 2018, 2.242 natural disasters took place in the region, resulting in more than USD 320 billion in damages, 295 million affected persons and 509 thousand deaths. Building resilience and preparedness are key elements for the area's development, specifically in a context where climate change effects on natural disasters is unknown. With the aim to contribute to the Sustainable Development Goal Target 17.13 (Global Macroeconomic Stability) and the Sendai Framework Priority 2 (Strengthening disaster risk governance to manage disaster risk), this thesis aims to assess whether monetary policy in the region is effective in absorbing spillover effects of disasters on economic growth. By running a panel analysis on 27 countries in the timeframe of 1970-2018 with random effects, the results reflect that the inflation target and flexible exchange rate are not contributing to alleviate pressure the external shock puts on growth. An exception carries with countries with a low rate of Central Bank governors' irregular turnover. This indicates that the inflation targets and floating exchange rate frameworks are unable to absorb the shocks due to inefficient management, rather than incompatibility with Latin America.
Klíčová slova
Monetary Policy, Natural Disasters, Central Banks, Latin America
Klíčová slova v angličtině
Monetary Policy, Natural Disasters, Central Banks, Latin America
Rozsah průvodní práce
66
Jazyk
AN
Anotace
Latin America is a tropical region prone to natural disasters; between 1970 and 2018, 2.242 natural disasters took place in the region, resulting in more than USD 320 billion in damages, 295 million affected persons and 509 thousand deaths. Building resilience and preparedness are key elements for the area's development, specifically in a context where climate change effects on natural disasters is unknown. With the aim to contribute to the Sustainable Development Goal Target 17.13 (Global Macroeconomic Stability) and the Sendai Framework Priority 2 (Strengthening disaster risk governance to manage disaster risk), this thesis aims to assess whether monetary policy in the region is effective in absorbing spillover effects of disasters on economic growth. By running a panel analysis on 27 countries in the timeframe of 1970-2018 with random effects, the results reflect that the inflation target and flexible exchange rate are not contributing to alleviate pressure the external shock puts on growth. An exception carries with countries with a low rate of Central Bank governors' irregular turnover. This indicates that the inflation targets and floating exchange rate frameworks are unable to absorb the shocks due to inefficient management, rather than incompatibility with Latin America.
Anotace v angličtině
Latin America is a tropical region prone to natural disasters; between 1970 and 2018, 2.242 natural disasters took place in the region, resulting in more than USD 320 billion in damages, 295 million affected persons and 509 thousand deaths. Building resilience and preparedness are key elements for the area's development, specifically in a context where climate change effects on natural disasters is unknown. With the aim to contribute to the Sustainable Development Goal Target 17.13 (Global Macroeconomic Stability) and the Sendai Framework Priority 2 (Strengthening disaster risk governance to manage disaster risk), this thesis aims to assess whether monetary policy in the region is effective in absorbing spillover effects of disasters on economic growth. By running a panel analysis on 27 countries in the timeframe of 1970-2018 with random effects, the results reflect that the inflation target and flexible exchange rate are not contributing to alleviate pressure the external shock puts on growth. An exception carries with countries with a low rate of Central Bank governors' irregular turnover. This indicates that the inflation targets and floating exchange rate frameworks are unable to absorb the shocks due to inefficient management, rather than incompatibility with Latin America.
Klíčová slova
Monetary Policy, Natural Disasters, Central Banks, Latin America
Klíčová slova v angličtině
Monetary Policy, Natural Disasters, Central Banks, Latin America
Zásady pro vypracování
The aim of this thesis is to understand how central banks manages monetary policy in the case of a natural disaster, such as drought, hurricanes, earthquakes and etc. For that, the thesis will count with a three parts: i) literature review of monetary policy management in the presence of a natural disaster, ii) stylized facts analysis of price shocks and macroeconomic management in a natural disaster situation, iii) a panel data analysis to understand if and how monetary policy is affected by natural disasters in Latin America. Therefore, this thesis will count with a quantitative method of analysis.
Zásady pro vypracování
The aim of this thesis is to understand how central banks manages monetary policy in the case of a natural disaster, such as drought, hurricanes, earthquakes and etc. For that, the thesis will count with a three parts: i) literature review of monetary policy management in the presence of a natural disaster, ii) stylized facts analysis of price shocks and macroeconomic management in a natural disaster situation, iii) a panel data analysis to understand if and how monetary policy is affected by natural disasters in Latin America. Therefore, this thesis will count with a quantitative method of analysis.
Seznam doporučené literatury
Adam, C. (2013). Coping with adversity: The macroeconomic management of natural disasters. Environmental Science & Policy 27, pp. 99-111.
Alloway, T. (2011, February 23). Monetary policy in a time of natural disaster. Retrieved from Financial Times: https://ftalphaville.ft.com/2011/02/23/495836/monetary-policy-in-a-time-of-natural-disaster/
Benson, C., & Clay, E. (2003). Economic and Financial Impacts of Natural Disasters: an Assessment of Their Effects and Options for Mitigation. London: Overseas Development Institute.
Cavallo, E., & Noy, I. (2010). The Economics of Natural Disasters. Washington, D.C.: Inter-American Development Bank.
Cevik, S., & Huang, G. (2018). How to manage the fiscal costs of natural disasters. Washington, DC: International Monetary Fund.
Frankel, J. (2009). Monetary Policy in Emerging Market Countries. European Central Bank.
Keen, D. B., & Pakko, R. M. (2011). Monetary Policy and Natural Disasters in a DSGE Model. Southern Economic Journal, 973-990.
Munich RE. (2017). Topics Geo - Natural catastrophes 2017. Retrieved from Munich RE: https://www.munichre.com/touch/naturalhazards/en/publications/topics-geo/2017/index.html
Okano, M. (2013). Monetary Policy and Natural Disasters: An Extension and Simulation Analysis in the Framework of New Keynesian Macroeconomic Model. Asia Pacific Institute of Research.
Parikoglou, I. (n.d.). Is monetary policy affected by natural disasters? Gelderland: Wageningen University.
Seznam doporučené literatury
Adam, C. (2013). Coping with adversity: The macroeconomic management of natural disasters. Environmental Science & Policy 27, pp. 99-111.
Alloway, T. (2011, February 23). Monetary policy in a time of natural disaster. Retrieved from Financial Times: https://ftalphaville.ft.com/2011/02/23/495836/monetary-policy-in-a-time-of-natural-disaster/
Benson, C., & Clay, E. (2003). Economic and Financial Impacts of Natural Disasters: an Assessment of Their Effects and Options for Mitigation. London: Overseas Development Institute.
Cavallo, E., & Noy, I. (2010). The Economics of Natural Disasters. Washington, D.C.: Inter-American Development Bank.
Cevik, S., & Huang, G. (2018). How to manage the fiscal costs of natural disasters. Washington, DC: International Monetary Fund.
Frankel, J. (2009). Monetary Policy in Emerging Market Countries. European Central Bank.
Keen, D. B., & Pakko, R. M. (2011). Monetary Policy and Natural Disasters in a DSGE Model. Southern Economic Journal, 973-990.
Munich RE. (2017). Topics Geo - Natural catastrophes 2017. Retrieved from Munich RE: https://www.munichre.com/touch/naturalhazards/en/publications/topics-geo/2017/index.html
Okano, M. (2013). Monetary Policy and Natural Disasters: An Extension and Simulation Analysis in the Framework of New Keynesian Macroeconomic Model. Asia Pacific Institute of Research.
Parikoglou, I. (n.d.). Is monetary policy affected by natural disasters? Gelderland: Wageningen University.
Přílohy volně vložené
1 CD
Přílohy vázané v práci
mapy, grafy, schémata, tabulky
Převzato z knihovny
Ano
Plný text práce
Přílohy
Posudek(y) oponenta
Hodnocení vedoucího
Záznam průběhu obhajoby
Catarina De Ester Braga presented results of the diploma thesis - Monetary Policy and Natural Disasters: Analysis for Latin America. Catarina Braga described the objectives and methodology of her thesis. Committee was familiarized with both reviews from supervisor and reviewer. Discussion followed - student answered the question related to the effect of fiscal policy in smoothing the impact of natural disasters. Student also presented "the theoretical body" of her thesis and clarified some doubts regarding the methodology.