Japan's 2011 Earthquake and Tsunami: Economic Effects and Implications for the United States
April 20, 2011 - R41702
The March 11, 2011, earthquake and tsunami that occurred in Japan followed by the nuclear crisis are having a large negative impact on the economy of Japan but a lesser effect on world trade and financial markets. Japan has lost considerable physical and human capital. Physical damage has been estimated to be from $195 billion to as much as $305 billion. (Greece's GDP is $330 billion.) In excess of 27,000 persons in Japan are killed or missing, and more than 300,000 homes and other buildings have been totally or partially damaged. The negative effects of the earthquake and tsunami have been compounded by the continuing crisis at the Fukushima nuclear reactors; the resulting evacuations, radioactive contamination, and shortages of electricity; continuing aftershocks; and the extensive damage to infrastructure, homes, manufacturing plants, and other buildings. The earthquake-related events in Japan are still unfolding, and each round of economic assessments seems more and more pessimistic. Analysts expect that over the next quarter or so, Japan's economy will contract and may fall into recession, but it may begin to expand later in the year because of rebuilding activity. Much depends on whether the damage from the nuclear plant can be contained, the speed ...