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Structural Estimation at the Product Level: The impact of the Kobe Earthquake

Author

Listed:
  • Masashige HAMANO
  • Kongphop WONGKAEW
  • Yuki MURAKAMI
  • Toshihiro OKUBO

Abstract

This paper studies the link between product-level dynamics and macroeconomic fluctuations using rich census data from Kobe covering the period 1992-2013. The dataset includes two major disruptions—the 1995 Kobe earthquake and the 2008 global financial crisis—and provides annual information for more than 1,000 six-digit product categories. To isolate the effects of the earthquake, we construct counterfactual cities, such as Nagoya. We estimate a multi-product firm DSGE model using maximum likelihood with a computationally robust estimation strategy. The results reveal substantial heterogeneity in product-level responses to shocks, with important implications for aggregate dynamics, the propagation of large disasters, and the role of product-specific characteristics in shaping macroeconomic resilience.

Suggested Citation

  • Masashige HAMANO & Kongphop WONGKAEW & Yuki MURAKAMI & Toshihiro OKUBO, 2026. "Structural Estimation at the Product Level: The impact of the Kobe Earthquake," Discussion papers 26019, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:26019
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