DYNAMMICs is a macroeconomic growth modeling framework that quantifies the many co-benefits of DRR investment for multiple hazards
DYNAMMICs is a macroeconomic growth model that evaluates co-benefits of DRR investments.
It captures forward-looking rational expectations of a representative household and firm, whose perception of future earnings and losses will be affected by the prevailing levels of disaster risk and DRR investment.
The changes in expected utility of households and expected profit of production sectors will then affect other aspects of economic activities such as the optimal levels of savings and investment, demands for labor and capital, shares of import/export and ultimately a country’s GDP growth trajectory.
- DYNAMMICs has been developed as part of the project on DRR CoBenefit.
- It is now being applied to case studies of flood and drought risk management in Angola, Tanzania, Rwanda, and Zambia.
- Also it is being applied to study of hurricane and beach erosion risk management in Barbados.
Promoting sustainable development while managing disaster risk effectively is one of the key challenges of our time. Hazards such as floods and droughts affect millions of people globally, threatening lives, destroying assets and hampering prospects for resilient future.
Disaster risk reduction (DRR) investment is therefore needed to safeguard our lives and assets.
Such investment is increasingly known to not only reduce risk, but also bring a number of co-benefits, such as wetland restoration that reduces extreme water flow and improves the environment or multi-purpose buildings that provide shelters and community space.
Some key issues explored
DYNAMMICs addresses issues such as:
- How the provision of safer environments fosters productive investments and private savings.
- How multi-purpose DRR investments bring co-benefits such as the improvement in public services provision and other socioeconomic gains.