Mount Fuji is an active volcano with a history of great damage from its eruption. This study aimed to investigate how production activities in 47 prefectures of Japan recover after an eruption. We developed a dynamic inter-regional input-output model with a production bottleneck based on a shortage of goods and disruption in transportation. This model also considered post-disaster production plans, and the role of inventories and support from imported goods. Using the simulation model, economic damages were evaluated based on several hypothetical scenarios and cases depending on different recovery situations. The analysis of virtual scenarios, classified as optimistic, base and pessimistic, showed that recovery of the production sector was delayed when direct damage to the disaster area was larger. In addition, the analysis of impacts on the regional economy with domestic traffic disruptions revealed a negative impact on production activities in the disaster area for a short term from traffic disruption due to volcanic ash. However, the long-term and wide-area effects are avoided if the volcanic ash is properly removed at an early stage. On the other hand, a shortage of imported goods causes significant effects on production bottlenecks and delays in economic recovery. Even in areas not directly affected by the eruption, the effects tend to spread over a wide area if a shortage of imported goods continues. This hypothetical analysis provides useful information for crisis management and resilience policies.
JEL Classifications:Q54, R15