LONG-RUN EFFECT OF A DISASTER: CASE STUDY ON THE KOBE EARTHQUAKE
2016 ◽
Vol 61
(01)
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pp. 1640009
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Keyword(s):
Long Run
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In 1995, the Kobe earthquake occurred in the second largest economic region of Japan, and its economic damages were accounted around 10 trillion yen. This paper presents an empirical investigation of long-run economic effects of the event based on a time-series data. The results indicate that the event had created statistically significant deviations from the pre-earthquake growth path of Kobe. In addition, the comparison with the projected pre-event growth path revealed that the long-run effects have resulted in a steady decline of per capita GRP, while the short-run impacts led to some positive impacts from recovery and reconstruction during the first several years.