Price shocks in regional markets: Japan's great Kantō Earthquake of 1923

Japan’s Great Kantō Earthquake of September 1st 1923 devastated the area around Tokyo and the country’s main port of Yokohama. This paper uses the earthquake as a case study to inform our understanding of the economics of disasters and the history of market integration. It seeks to test two main assumptions: firstly, that shifting demand and supply curves consequent on a disaster will have some impact on prices; and secondly, that any local changes in the disaster region are likely to be diffused across a wider geographical area. We make use of a unique monthly wholesale price dataset for a number of cities across Japan, and our analysis suggests three main findings: that price changes in the affected areas immediately following the disaster were in most cases reflected in price changes in Japan’s provincial cities; that cities further away from the devastation witnessed smaller price changes than those nearer to the affected area; and that the observed pattern of price changes reflects the regional heterogeneity identified by scholars who have worked on market integration in Japan

Nature, markets and state response: the drought of 1939 in Japan and Korea

Large areas of Northeast Asia experienced drought in 1939. Agricultural production in Korea decreased significantly, but the drought did not cause famine in Japan despite its dependence on rice imports from Korea. The paper analyses the impact of the 1939 drought on the markets for rice and electricity in Japan. The authorities were ill-prepared for such a disaster but willing to use it for the purpose of covering for other problems. The drought thus accelerated the move of Japan's economic system towards a managed economy. A lower total rainfall in Japan in 1940 did not generate similar problems, suggesting that the broader political, economic, and social context is crucial to the identification of short-term climatic fluctuations as crises