TY - JOUR
T1 - Supply chain disruptions
T2 - Evidence from the great east japan earthquake
AU - Carvalho, Vasco M.
AU - Nirei, Makoto
AU - Saito, Yukiko U.
AU - Tahbaz-Salehi, Alireza
N1 - Funding Information:
the financial support of the European Research Council under the grant "Production Networks in Macroeconomics" (no. RG72699)
Publisher Copyright:
© 2020 The Author(s) 2020. Published by Oxford University Press on behalf of President and Fellows of Harvard College.
PY - 2021/5/1
Y1 - 2021/5/1
N2 - Exploiting the exogenous and regional nature of the Great East Japan Earthquake of 2011, this article 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 along 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.
AB - Exploiting the exogenous and regional nature of the Great East Japan Earthquake of 2011, this article 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 along 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.
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U2 - 10.1093/qje/qjaa044
DO - 10.1093/qje/qjaa044
M3 - Review article
AN - SCOPUS:85100187178
SN - 0033-5533
VL - 136
SP - 1255
EP - 1321
JO - Quarterly Journal of Economics
JF - Quarterly Journal of Economics
IS - 2
ER -