Supply Chain Disruptions: Evidence from the Great East Japan Earthquake

Vasco Carvalho, Makoto Nirei, Yukiko Saito and Alireza Tahbaz-Salehi

No 11711, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Exploiting the exogenous and regional nature of the Great East Japan Earthquake of 2011, this paper provides a quantification of the role of input-output linkages as a mechanism for the propagation and amplification of shocks. We document that the disruption caused by the disaster propagated upstream and downstream supply chains, affecting the direct and indirect suppliers and customers of disaster-stricken firms. Using a general equilibrium model of production networks, we then obtain an estimate for the overall macroeconomic impact of the disaster by taking these propagation effects into account. We find that the earthquake and its aftermaths resulted in a 0.47 percentage point decline in Japan’s real GDP growth in the year following the disaster.

Keywords: Input-output; Natural disasters; Production networks; Supply chains; Aggregate fluctuations (search for similar items in EconPapers)
Date: 2016-12
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Citations: View citations in EconPapers (163)

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Related works:
Journal Article: Supply Chain Disruptions: Evidence from the Great East Japan Earthquake* (2021)
Working Paper: Supply Chain Disruptions: Evidence from the Great East Japan Earthquake (2016)
Working Paper: Supply Chain Disruptions: Evidence from the Great East Japan Earthquake (2016)
Working Paper: Supply Chain Disruptions: Evidence from the Great East Japan Earthquake (2014)
Working Paper: Supply Chain Disruptions: Evidence from Great East Japan Earthquake (2014)
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