Economic Impacts of a Midwestern Earthquake
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Indirect loss is any loss other than direct loss. This seems tautological, however, it is important to begin with the obvious. Direct loss is a loss linked directly to an earthquake. It includes all damages, plus employment losses due directly to the closure of the damaged facility. Indirect losses/gains are anything else. Direct losses can produce dislocations in factories or commercial ventures (real ripple effects), banking, which causes uncertainty and a subsequent tightening of overall credit conditions (bank systemic risk), and insurance, thereby limiting coverage and triggering subsequent economic dislocations (insurance systemic risk).
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