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A General Equilibrium Assessment on a Compound Disaster in Northern Taiwan

Author

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  • Michael C. Huang

    (National Graduate Institute for Policy Studies)

  • Nobuhiro Hosoe

    (National Graduate Institute for Policy Studies)

Abstract

We analyze the economic impact on key sectors of a compound disaster in Taiwan. While Taiwan has high-tech export-oriented industries such as semiconductors and electronic products, three out of four nuclear power plants are located in the at-risk areas close to its capital city with industrial agglomeration. We use a computable general equilibrium (CGE) model to simulate a compound disaster in northern Taiwan. We consider the individual disaster components of labor loss, capital loss, power crisis, and finally combine them to simulate a compound disaster comprehensively. The simulation results show that Taiwan’s key sectors such as semiconductor and electric equipment would be affected severely by capital and labor losses but not by the power crisis. This implies that no electric power allocation would be needed for these industries although we are often tempted to do so in emergencies.

Suggested Citation

  • Michael C. Huang & Nobuhiro Hosoe, 2014. "A General Equilibrium Assessment on a Compound Disaster in Northern Taiwan," GRIPS Discussion Papers 14-06, National Graduate Institute for Policy Studies.
  • Handle: RePEc:ngi:dpaper:14-06
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    References listed on IDEAS

    as
    1. Shin-Horng Chen, 2002. "Global Production Networks and Information Technology: The Case of Taiwan," Industry and Innovation, Taylor & Francis Journals, vol. 9(3), pages 249-265.
    2. Nobuhiro Hosoe & Kenji Gasawa & Hideo Hashimoto, 2010. "Textbook of Computable General Equilibrium Modelling," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-28165-3.
    3. Asian Development Bank (ADB), 2013. "Investing in Resilience: Ensuring a Disaster-Resistant Future," ADB Reports RPT125182-3, Asian Development Bank (ADB), revised 21 May 2013.
    4. Adam Rose & Shu‐Yi Liao, 2005. "Modeling Regional Economic Resilience to Disasters: A Computable General Equilibrium Analysis of Water Service Disruptions," Journal of Regional Science, Wiley Blackwell, vol. 45(1), pages 75-112, February.
    5. P. K. Narayan, 2003. "Macroeconomic impact of natural disasters on a small island economy: evidence from a CGE model," Applied Economics Letters, Taylor & Francis Journals, vol. 10(11), pages 721-723.
    6. Hosoe, Nobuhiro, 2006. "The deregulation of Japan's electricity industry," Japan and the World Economy, Elsevier, vol. 18(2), pages 230-246, March.
    7. Nobuhiro Hosoe, 2014. "Japanese manufacturing facing post-Fukushima power crisis: a dynamic computable general equilibrium analysis with foreign direct investment," Applied Economics, Taylor & Francis Journals, vol. 46(17), pages 2010-2020, June.
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