Climate Shocks and Economic Resilience: Long-Term Growth Dynamics in Emerging Markets

Archana Pandey

Climate Shocks and Economic Resilience: Long-Term Growth Dynamics in Emerging Markets

Author(s)	Archana Pandey
Country	India
Abstract	Natural disasters due to climate change have become one of the biggest challenges faced by emerging market economies in the early part of the twenty-first century. The warming of the planet, extreme weather events, and increased environmental uncertainty are influencing the development patterns in vulnerable areas. Emerging markets, defined by urbanization, inadequate infrastructure, institutional deficiencies, and reliance on climate-dependent industries, suffer greater economic damages from the effects of climate shocks. While there is abundant literature highlighting the impact of disasters on growth, including immediate effects such as infrastructure damage, income losses, and budgetary pressures, the long-term growth outcomes are less explored. This paper focuses on the role played by climate shocks on long-term economic growth and resilience in emerging markets. Instead of looking at the disaster effects as a negative shock, the paper looks into institutional capabilities, adaptive investments, structural changes, and policy responses to analyze the recovery process. Based on economic growth theory, disaster economics, and resilience, the paper will show how climate shocks act as turning points in either entrenching poverty traps or initiating a modernization drive. This study proves that economies endowed with better governance, greater diversity in their productive structure, human capital, and infrastructure have much higher rates of recovery and positive results from their growth processes. In contrast, weak institutional structures make economies more vulnerable to any negative impacts and contribute to their economic stasis. Accordingly, the main source of economic resilience is not the avoidance of shocks because it becomes difficult under climate change, but the ability of economies to transform those shocks into the sources of their growth in a sustainable manner. The work contributes to discussions about climate adaptation, development economics, and macroeconomics.
Keywords	climate shocks, economic resilience, emerging markets, natural disasters, economic growth, climate adaptation, development economics
Field	Sociology > Economics
Published In	Volume 4, Issue 6, November-December 2022
Published On	2022-12-07

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Climate Shocks and Economic Resilience: Long-Term Growth Dynamics in Emerging Markets

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