A multi-regional general equilibrium analysis taking account of disaster risk

The paper aims at examining the long-term effects of anti-disaster mitigation of infrastructure upon the regional economy. A multi-regional general equilibrium model taking account of disaster risk is formulated to conduct the analysis. A natural disaster brings about catastrophic economic losses to the regional economy. In the short term, individuals and firms cannot change their location. But, in the long run, they can change their locations. Anti-disaster mitigation of infrastructure not only reduces damage caused by a disaster but also may attract more individuals and firms to relatively safer but still vulnerable areas. The paper also investigates the relationships between structure of cities, trade patterns and long-term effects of anti-disaster mitigation by the use of a multi-regional general equilibrium model