Estimation of the indirect losses in the Japanese economy due to natural disasters

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Modern economies are frequently affected by natural disasters and domestic and overseas financial crises. These events disrupt production and cause multiple other types of economic losses, including negative impacts on the banking system. Understanding the transmission mechanism that causes various negative second-order post-catastrophe effects is crucial for policymakers to develop more efficient recovery strategies. We could in this project build an agent-based model inspired by the paper of Inoue and Todo (2019). Our model is calibrated on the Japanese supply chain, and the bank-firm network of Japan, during the Tohoku earthquake and tsunami (2011), and we could show the more risky industries and prefectures due to the natural disasters.