Four New Horsemen of an Apocalypse? Solar Flares, Super-volcanoes, Pandemics, and Artificial Intelligence

If economists have largely failed to predict or prevent the Global Financial Crisis in 2008, and the more disastrous economic collapse associated with the pandemic of 2020, what else is the profession missing? This is the question that motivates this survey. Specifically, we want to highlight four catastrophic risks – i.e., risks that can potentially result in global catastrophes of a much larger magnitude than either of the 2008 or 2020 events. The four risks we examine here are: Space weather and solar flares, super-volcanic eruptions, high-mortality pandemics, and misaligned artificial intelligence. All four have a non-trivial probability of occurring and all four can lead to a catastrophe, possibly not very different from human extinction. Inevitably, and fortunately, these catastrophic events have not yet occurred, so the literature investigating them is by necessity more speculative and less grounded in empirical observations. Nevertheless, that does not make these risks any less real. This survey is motivated by the belief that economists can and should be thinking about these risks more systematically, so that we can devise the appropriate ways to prevent them or ameliorate their potential impacts.

Valuing the Impacts of Landslides: A Choice Experiment Approach

This paper analyzes the preferences for reducing the negative impacts of landslides. Negative consequences of landslides include impacts on transport infrastructure, humans, the environment and important societal services. We apply a choice experiment. The analysis is based on 6048 observations from 504 participants in a web panel. The overall finding is that reducing the risk of landslides would have a positive impact on individuals’ utility, and that individuals prioritize preventing negative consequences on human health and safety over maintaining societal services, environmental status, and preventing damages to transport infrastructure, which seems to be least pressing. Results indicate that prioritizations of citizens differ from the prioritizations of public authorities, whose risk assessment model for evaluating the consequences of landslides gives equal weight to the different impacts.

Estimated Economic Impacts of the 2019 Midwest Floods

In the spring of 2019, U.S. agriculture experienced a record high number of prevented planted acres primarily due to historic rainfall across large portions of the Corn Belt and Mid-South. Producers of corn, upland cotton, soybean, and wheat were impacted with a substantial loss of revenue due to no crops being produced and marketed. With about 11.4 million acres of corn not planted, foregone gross revenue from crop sales likely exceeded $6 billion alone. Instead of focusing on the loss of producers’ incomes as a result of prevented planted acres, our analysis focuses on the economic impacts, due to lost sales, for firms that provide inputs to farmers. Acres prevented from planting resulted in producers not incurring typical expenditures for planting and post planting inputs such as seed, crop nutrients, and crop protection (herbicides, insecticides, fungicides, etc.). Agricultural input manufacturers, wholesalers, and retailers do not have similar opportunities to insure against foregone sales and have received no disaster assistance payments. Normally, the large geographic footprint of many of these firms mitigates the impact of localized weather effects. However, given the widespread nature of the wet spring, these firms were negatively affected across Corn Belt and Mid-South representing a substantial production area. Regional economic impact of declines in sales by agricultural input providers due to wet weather-based prevented plantings on 13.1 million acres. Direct sale losses of $2.9 billion led to $4.5 billion losses in total sales that were concentrated in parts of Minnesota, South Dakota, and Illinois.