2017 Volume 5 Issue 1 Pages 45-57
In order to examine the economic impact of the damage due to the Great East Japan Earthquake in 2011 and the reconstruction of the disaster-stricken areas and all prefectures, this study aims to develop a dynamic spatial computable general equilibrium model. This model describes the economic dynamics of the damage caused by the earthquake, the resulting reconstructions, and measures the dynamic benefits of reconstruction by using numerical simulations. The findings of this study are as follows: (1) The discounted present value of the dynamic damage cost along with reconstruction from the earthquake was estimated to decrease to about 17.9 trillion yen in total, which was 1.29 times greater than decreases in the direct damage cost of about 13.9 trillion yen in the Tohoku disaster-stricken areas. (2) The damage costs and benefits could be measured more accurately based on the economic theory by introducing the dynamic multiplier of damage costs and benefits into the conventional benefit measurement technique. (3) The forward-looking dynamic model, despite strict constraints and unrealistic assumptions, could show realistic results.
