Liu Zhenhua: Japan'S Economy Will Fall Into A Long-Term Recession

2011/4/5 14:06:00 52

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Liu Zhenhua Japan'S Long-Term Economic Recession

The following table compares the 3.11 major earthquakes with the largest disasters in Japan's history.

Whether from the death toll, the affected population or the economic losses, Japan's 3.11 major earthquakes can be attributed to the top 1 or the top 2 most serious disasters.

The source of disaster data is EM-DAT, as long as 1 of the following 4 conditions can be entered into the database: 10 or more people die; 100 or more people are affected; declare a state of emergency; request.

international aid

。

According to this standard, 284 disaster events have been recorded in Japan since 1900, and the 3.11 earthquake is the most serious 1% in the history of Japanese disasters.

The following is a picture of the long-term impact of the most severe (1% ranks) natural disasters on the economy of a country in the history of the world.

The left and right axis is GDP per person and the horizontal axis is the date (year).

Triangular dotted line

To assume the trend of economic development without disasters, the circular solid line takes place.

Natural disaster

The trend of economic development (simulation).

Source:Cavallo et al., (2010)

As can be seen from the above picture, the average GDP per capita of the disaster affected country is 10% lower than that of the GDP per capita after 10 years of extremely serious natural disasters.

Without natural disasters, the GDP per capita in 10 years will be 18% higher than it is now.

In this sense, Japan's economy may be in a prolonged recession due to the 3.11 earthquake.

This model is the result of Cross-country analysis, and Japan has not considered it as a unique feature of a single country.

The latter research can be improved.

Worst case scenario: Japan's economic recession, the European sovereign debt crisis, China's asset bubble burst, the US housing market and economic recovery lags behind, and several factors superimposed may trigger systemic risks in the earth economy.