Evaluating the Economic Response to Japan’s Earthquake

Molly Kathleen Schnell, David E Weinstein

Research output: Contribution to journalArticle

Abstract

This paper compares the 1995 Kobe earthquake with the more recent one in Tohoku. The impact of the recent earthquake on industrial production was much larger and long-lasting than that of the 1995 earthquake. We find that very little of this can be explained by differences in government expenditures or private consumption. However, we find very substantial differences in energy production in the wake of the two earthquakes. The substantial and persistent drop in energy output is likely to have exacerbated supply disruptions and may continue to slow the pace of recovery. Moreover, we provide some evidence that Japan’s increasing reliance on fossil fuel sources of energy is likely to result in a large number of deaths and increases in morbidity due to increased air pollution. These results highlight the difficulties that Japan is likely to face in its move away from nuclear power.
Original languageEnglish (US)
Number of pages13
JournalThe Research Institute of Economy, Trade and Industry
VolumePolicy Discussion Papers 12003
StatePublished - Feb 2012

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