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The impact of production and infrastructure shocks

Author

Listed:
  • Oosterhaven, J.
  • Bouwmeester, M.C.
  • Nozaki, M.

    (Groningen University)

Abstract

This paper develops a methodology to predict the wider interregional and interindustry economic impacts of major catastrophes, such as earthquakes and tsunamis. Short-run impacts are determined by the attempts of economic actors to continue their familiar activities and established trade patterns, as closely as possible. We propose to model these behavioural reactions by minimizing the information gain between the pre- and the post-catastrophe pattern of economic transactions in the economy at hand. The basic non-linear program reproduces the short-run equilibrium described by the base year interregional input-output table (IRIOT) of a hypothetical open, two regions, two industries economy. The proposed methodology is further tested by means of a comparison of the base scenario with two scenarios with regional production shocks and two scenarios with interregional infrastructure shocks. We conclude that the outcomes are reasonable and become more plausible when the positive foreign trade balance limitation is dropped.

Suggested Citation

  • Oosterhaven, J. & Bouwmeester, M.C. & Nozaki, M., 2013. "The impact of production and infrastructure shocks," Research Report 13017-GEM, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    • Handle: RePEc:gro:rugsom:13017-gem
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    File URL: http://hdl.handle.net/11370/43fe9f31-7ba4-4113-92fb-00e425827f14
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    References listed on IDEAS

    as
    1. Theo Junius & Jan Oosterhaven, 2003. "The Solution of Updating or Regionalizing a Matrix with both Positive and Negative Entries," Economic Systems Research, Taylor & Francis Journals, vol. 15(1), pages 87-96, March.
    2. Wenfeng Huang & Shintaro Kobayashi & Hajime Tanji, 2008. "Updating an Input-Output Matrix with Sign-preservation: Some Improved Objective Functions and their Solutions," Economic Systems Research, Taylor & Francis Journals, vol. 20(1), pages 111-123.
    3. repec:dgr:rugggd:gd-132 is not listed on IDEAS
    4. Roberta Capello & Peter Nijkamp (ed.), 2009. "Handbook of Regional Growth and Development Theories," Books, Edward Elgar Publishing, number 12874.
    5. Jan Oosterhaven, 2012. "Adding Supply-Driven Consumption Makes The Ghosh Model Even More Implausible," Economic Systems Research, Taylor & Francis Journals, vol. 24(1), pages 101-111, October.
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    Cited by:

    1. Bouwmeester, Maaike C. & Oosterhaven, J., 2017. "Economic impacts of natural gas flow disruptions between Russia and the EU," Energy Policy, Elsevier, vol. 106(C), pages 288-297.
    2. Oosterhaven, Jan, 2015. "On the doubtful usability of the inoperability IO model," Research Report 15008-EEF, University of Groningen, Research Institute SOM (Systems, Organisations and Management).

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