Economic System Impact Mechanism Of Catastrophe

The indirect impact of natural disaster on economic includes business interruption loss, supply-chain disruption loss, premium on investment loss, and so on. It is useful to quantify the economic impact of natural disaster. When we apply Input-Out model and CGE model to investigate this, we find it is essential to analysis the impact mechanism of catastrophe against economic system in order to incorporate exogenous shock into economic system. This paper just answers this question. Interaction process between natural disaster system and economic system is introduced firstly. Then the impact of catastrophe upon production, consumption and price, and transmission process are analyzed respectively. These will help building disaster block in CGE model in the following research.