THE IMPACT OF EXTREME RISK EVENTS ON THE ECONOMY

Abstract

In this paper I wanted to highlight the impact of extreme risk events on the economy. The issue that I will approach in this paper is one of great importance, taking into account that extreme risk events that occur are  different  and are becoming more frequent  and harder to  control.  The quickly  development  of  these eventsrequires the implementation of a suitable risk management system. The complexity of this issue involves different approaches that can be interrelated in: computer science, mathematics, risk management, crisis management, andmodeling and simulation of extreme risk events. Natural disasters are rare events, but when they occur are causing a huge damage and an adequate management is necessary to return to a state of normality in a short time. To achieve our goal, in the first part of the paper, we presented the problems that an extreme risk event causes in a country when they occur. In the last part of the paper I presented analytical, statistical and econometric methods used in analysis of the impact on the economy of extreme risk events.

Natural  disasters,  which  are  extreme  risk  events,  rarely  produce,  but  when  they  occur  causing  hugedamage and an adequate management is necessary to return to a state of normality in a short time.