Library Header Image
LSE Research Online LSE Library Services

Longterm decision making under the threat of earthquakes?

Camacho, Carmen and Sun, Yu (2019) Longterm decision making under the threat of earthquakes? Systemic Risk Centre Discussion Papers (91). Systemic Risk Centre, The London School of Economics and Political Science, London, UK.

[img] Text (dp-91) - Published Version
Download (1MB)


Under the threat of earthquakes, long-term policy makers need tools to optimally decide on the economic trajectories that will maximize the society welfare. Tools should be flexible and account for the consequences of earthquakes, incorporating the best estimate of their frequency and intensity. In this regard, this paper presents a modeling strategy that combines optimal control techniques and Bayesian learning: after an earthquake occurs, policy makers can improve their knowledge and adjust policies optimally. Some numerical examples illustrate the advantages of our modeling strategy along different dimensions. While Japan symbolizes the policy maker who has learned from earthquakes protecting the economy accordingly; Italy underlines the importance of prevention capital. China shows the hidden dangers of its extraordinary economic growth. Finally, the Chinese region of Yunan puts forward the roles of learning and of political independence.

Item Type: Monograph (Discussion Paper)
Official URL:
Additional Information: © 2019 The Author(s)
Divisions: Management
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HG Finance
JEL classification: C - Mathematical and Quantitative Methods > C6 - Mathematical Methods and Programming > C60 - General
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture; Natural Resources; Energy; Environment; Other Primary Products
O - Economic Development, Technological Change, and Growth > O2 - Development Planning and Policy > O21 - Planning Models; Planning Policy
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate; Natural Disasters
Date Deposited: 30 Jun 2023 16:18
Last Modified: 16 May 2024 12:28

Actions (login required)

View Item View Item


Downloads per month over past year

View more statistics