Munich Personal RePEc Archive

Economic Activities and Regional Correlation During Economic and Natural Disasters

Nagayasu, Jun (2020): Economic Activities and Regional Correlation During Economic and Natural Disasters.

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Abstract

Life is characterized by risks of different features and origins. Examining the economic and natural disasters that have occurred in Japan in the past decades, we show that regional relationships strengthen during chaotic moments, such as the Lehman Brothers collapse, the Great East Japan Earthquake, and the coronavirus disease (COVID-19) pandemic. Moreover, we find that business prospects are a good predictor of labor market conditions, and employment opportunities deteriorate more severely when regions are highly correlated. Our study indicates the side effect of market integration and the relevance of regional economic centers in cushioning nationwide economic and natural shocks.

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