Growth and Fiscal Analysis of Risk Layering Strategies (GFRList)

'Risk-layering' strategies to reduce, retain and transfer disaster risk not only protect productive assets and lives, but implemented appropriately, could yield a number of additional benefits that could enhance wellbeing and resilience. Yet, conventional static macroeconomic models are not capable of analysing how alternative fiscal resource allocations to risk-layering options may affect developing countries’ growth trajectories under the impact of climate change.

© Onepony |

© Onepony |

This project hence develops a new dynamic and stochastic macroeconomic framework capable of analysing sustainable growth implications of climate extreme risk management in developing countries. The proposed dynamic macroeconomic model captures a forward-looking rational expectation of a representative household and firm, whose perception of future earnings and losses will be affected by the prevailing levels of climate extreme risk and DRR investment. These changes will then affect other aspects of economic activities such as the optimal levels of saving and investment, demands for labor and capital, shares of import/export and ultimately a country’s GDP growth trajectory. The interaction between DRR investment and risk retention/transfer instruments will be analysed as policy scenarios in this study.

The project estimates the benefits of DRR as applied to coastal hazard management in Barbados in collaboration with the InterAmerican Development Bank (IDB).

Project Details:

Project duration: December  2019 - February 2021

Funding Partner: Inter-American Bank

Additional relevant publications

Ishiwata, H., & Yokomatsu, M. (2018). Dynamic Stochastic Macroeconomic Model of Disaster Risk Reduction Investment in Developing Countries. Risk Analysis, 38(11), 2424-2440.

Yokomatsu, M. (2018). A Commentary on “Recovery from Catastrophe and Building Back Better (Takeuchi and Tanaka, 2016)”–Structure of Damage of Production Capital Stock on Normative Economic Process. Journal of Disaster Research, 13(3), 564-570.

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Last edited: 05 January 2021


Muneta Yokomatsu

Guest Research Scholar

Equity and Justice Research Group|Water Security Research Group|Systemic Risk and Resilience Research Group|Population and Just Societies Program

T +43(0) 2236 807 587

Junko Mochizuki

Research Scholar

Water Security Research Group|Biodiversity and Natural Resources Program

T +43(0) 2236 807 576

Taher Kahil

Research Group Leader

Water Security Research Group|Biodiversity and Natural Resources Program

T +43(0) 2236 807 325


December 2019 - February 2021


Yokomatsu, M. & Hochrainer-Stigler, S. (2020). Disaster Risk Reduction and Resilience. Cham, Switzerland: Springer. ISBN 978-981-15-4319-7 10.1007/978-981-15-4320-3.

Mochizuki, J. & Naqvi, A. (2019). Reflecting Disaster Risk in Development Indicators. Sustainability 11 (4), e996. 10.3390/su11040996.

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