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The paper focuses on the direct and indirect impact of catastrophic natural disasters on economy of a country by combining information from case studies of major catastrophic events. The paper studies the ability of the economy to reconstruct after the events. This ability is an important parameter to estimate the overall vulnerability of a country. Resilience consists of two components: instantaneous resilience, which is the ability to limit the magnitude of the immediate loss for a given amount of capital loss, and dynamic resilience, which is the ability to reconstruct and recover quickly. An optimal risk management approach is to include direct disaster risk reduction actions and measures to reduce indirect impacts (resilience building actions).