Negative IO Supply Shock Analyses: A Disaster and a Solution

Jan Oosterhaven

Chapter Chapter 7 in Rethinking Input-Output Analysis, 2019, pp 83-92 from Springer

Abstract: Abstract This chapter deals with impact analyses of negative supply shocks, such as natural and man-made disasters. One of the most used approaches in this field is the inoperability IO model. It is shown to be a regular demand-driven IO model formulated in relative changes, which inadequately estimates only the negative demand-side impacts of disasters and completely ignores to positive substitution effects on the supply side of the economy. Next, an easy to use nonlinear, the supply-use programming model is presented. Its basic assumption is that economic actors, after a disaster, primarily try to restore their old pattern of economic transactions as much as possible. Finally, by adding the usual fixed ratio assumptions of IO and SU models, an indication is given of the heavy overestimation of the negative impacts of a disaster when demand-driven IO of SU models are used.

Keywords: Supply shocks; Terrorist attacks; Disaster impact analysis; Inoperability input–output model; Hypothetical extraction method; CGE models; Nonlinear programming models; Danube and Elbe floods (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sbrchp:978-3-030-33447-5_7

Ordering information: This item can be ordered from
http://www.springer.com/9783030334475

DOI: 10.1007/978-3-030-33447-5_7

Access Statistics for this chapter

More chapters in SpringerBriefs in Regional Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().