Macro-economic Concepts of Vulnerability: Dynamics, Complexity and Public Policy
The reported costs of disasters caused by natural hazards have increased significantly during recent decades, with a 14-fold increase between the 1950s and 1990s. During the 1990s, such major catastrophes are reported to have resulted in economic losses averaging an estimated US$54,000 million per annum (in 1999 prices) (Munich Re, 1999). Record losses of some US$198,000 million were recorded in 1995, the year of the Kobe earthquake – equivalent to 0.7 per cent of global gross domestic product (GDP). But what do these figures mean? How were they compiled? Are they accurate? And what do they tell us about vulnerability from an economic perspective, or related appropriate policy response?