Supply Chain Disruptions: Evidence from the Great East Japan Earthquake∗
Supply Chain Disruptions: Evidence from the Great East Japan Earthquake∗ Vasco M. Carvalhoy Makoto Nireiz Yukiko U. Saitox Alireza Tahbaz-Salehi{ June 2020 Abstract Exploiting the exogenous and regional nature of the Great East Japan Earthquake of 2011, this paper provides a quantification of the role of input-output linkages as a mechanism for the prop- agation and amplification of shocks. We document that the disruption caused by the disaster propagated upstream and downstream supply chains, affecting the direct and indirect suppliers and customers of disaster-stricken firms. Using a general equilibrium model of production net- works, 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. ∗We thank the co-editor and four anonymous referees for helpful comments and suggestions. We thank Hirofumi Okoshi and Francisco Vargas for excellent research assistance. We are also grateful to Daron Acemoglu, Pol Antras,` David Baqaee, Paula Bustos, Lorenzo Caliendo, Arun Chandrasekhar, Ryan Chahrour, Giancarlo Corsetti, Ian Dew-Becker, Masahisa Fujita, Julian di Giovanni, Sanjeev Goyal, Adam Guren, Matt Jackson, Jennifer La’O, Glenn Magerman, Isabelle Mejean,´ Ameet Morjaria, Kaivan Munshi, Michael Peters, Aureo de Paula, Jacopo Ponticelli, Farzad Saidi, Adam Szeidl, Edoardo Teso, Yasuyuki Todo, Aleh Tsyvinski, Liliana Varela, Andrea Vedolin, Jaume Ventura, Jose Zubizarreta, and numerous seminar and conference participants for useful feedback and suggestions. We also thank the Center for Spatial Information Science, University of Tokyo for providing us with the geocoding service.
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