Thinking about Imbalances in Post-catastrophe Economies: An Input-Output based Proposition

Albert E. Steenge and Marija Bockarjova

Economic Systems Research, 2007, vol. 19, issue 2, 205-223

Abstract: In this paper we focus on the consequences of a major catastrophe for a modern economy, where 'major' means that a significant part of the economy's productive capacity is lost. In the aftermath of the catastrophe, authorities have to address a great number of issues. We show, using basic principles, that input-output methodology offers a flexible set of tools to address three fundamental issues: (1) obtaining a systematic insight in the imbalances that exist in the non-affected area after the catastrophe, (2) determining the nature of these imbalances and the way they affect options in the recovery process, and (3) introducing the elements of a cost-benefit analysis in the context of prevention and precautionary policies. Our approach strongly supports the need for extensive contingency planning in the presence of major natural hazards. A numerical example accompanies the various steps of the exercise.

Keywords: Disaster; input-output analysis; economic network; cost-benefit analysis (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (21)

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DOI: 10.1080/09535310701330308

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