Implications of Major Adverse Events on Productivity
Since 2000, there have been three major global slowdowns, with the latest and most pronounced episode triggered by the COVID-19 pandemic. At the same time, many countries have faced major adverse events including natural disasters, wars, and financ...
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| Language: | English |
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/706191600779573582/Implications-of-Major-Adverse-Events-on-Productivity http://hdl.handle.net/10986/34509 |
| Summary: | Since 2000, there have been three major
global slowdowns, with the latest and most pronounced
episode triggered by the COVID-19 pandemic. At the same
time, many countries have faced major adverse events
including natural disasters, wars, and financial crises, all
of which can lead to long-lasting harm to productivity. Wars
inflict particularly severe damage to productivity, while
financial crises also lead to substantial losses, especially
accompanied by a rapid build-up of debt. The greater
frequency of natural disasters, especially climate
disasters, means that they have the largest aggregate impact
on productivity, as natural disasters have occurred most
often and their frequency has doubled since 2000. Global
adverse events can have large sustained negative effects on
productivity through dislocating labor, tightening of
credit, disrupting value chains, and decreasing innovation.
Policies to counter the negative consequences of adverse
shocks include accommodative fiscal policies, such as
reconstruction spending on resilient infrastructure;
transparent governance; efficient use of relief funds; as
well as growth-friendly structural reforms. Appropriate
policies and regulations concerning finance, construction,
and environmental protection can help reduce the frequency
of adverse shocks. |
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