Abstract
In this contribution we discuss new developments in Dutch thinking about the increasing risk of big floods. A first issue concerns the choice of methodology. Today several ones exist to assess the consequences of big natural catastrophes, differing significantly in background philosophy, objective or scope. It is questionable whether market-based approaches that are dominant in the U.S. are fruitful for a small country with a large state influence, such as the Netherlands. Probably it is better to start from the notion of specific types of network disruptions in a highly developed and densely populated country.
In this paper, we focus on the interdependencies between production and consumption activities. This leads to an investigation based on Input-Output (I-O) methodologies. A big flood then causes a series of disruptions in the existing production and consumption networks. Our paper addresses the point that I-O as it stands is not very appropriate. The basic problem is that I-O models stress interaction and equilibrium, while here we have to deal with disruption and disequilibrium. This means that the economy suddenly has to decide on the way its now restricted resources should be distributed.
Our research is based on the basic hypothesis underlying I-O models, i.e. the need to distinguish between two major categories of destination, ‘final consumption’, and ‘intermediate demand’. Outcomes will be different according to the choices being made. One reason is the presence of multiplier effects, which reflect current interactions. A choice in favour of final demand will alleviate problems of the affected groups, but at the same time will increase inter-industry imbalances, and imply a heavy role for supporting import. In fact, a major decision is asked for. Economic policy needs to steer the distribution of the available goods in intelligent ways between various categories of buyers and suppliers. The choice is not straightforward, and involves complex interrelations and interactions.
In this paper, we focus on the interdependencies between production and consumption activities. This leads to an investigation based on Input-Output (I-O) methodologies. A big flood then causes a series of disruptions in the existing production and consumption networks. Our paper addresses the point that I-O as it stands is not very appropriate. The basic problem is that I-O models stress interaction and equilibrium, while here we have to deal with disruption and disequilibrium. This means that the economy suddenly has to decide on the way its now restricted resources should be distributed.
Our research is based on the basic hypothesis underlying I-O models, i.e. the need to distinguish between two major categories of destination, ‘final consumption’, and ‘intermediate demand’. Outcomes will be different according to the choices being made. One reason is the presence of multiplier effects, which reflect current interactions. A choice in favour of final demand will alleviate problems of the affected groups, but at the same time will increase inter-industry imbalances, and imply a heavy role for supporting import. In fact, a major decision is asked for. Economic policy needs to steer the distribution of the available goods in intelligent ways between various categories of buyers and suppliers. The choice is not straightforward, and involves complex interrelations and interactions.
| Original language | English |
|---|---|
| Pages | 23 |
| Publication status | Published - Aug 2005 |
| Event | 45th European Congress of the Regional Science Association 2005: Land Use and Water Management in a Sustainable Network Society - Vrije Universiteit, Amsterdam, Netherlands Duration: 23 Aug 2005 → 27 Aug 2005 Conference number: 45 |
Conference
| Conference | 45th European Congress of the Regional Science Association 2005 |
|---|---|
| Country/Territory | Netherlands |
| City | Amsterdam |
| Period | 23/08/05 → 27/08/05 |