The Robustness of Economic Activity to Destructive Events

Posted: 12 Nov 2009

See all articles by John W. Galbraith

John W. Galbraith

McGill University - Department of Economics; Center for Interuniversity Research and Analysis on Organization (CIRANO)

Date Written: May 1, 2009

Abstract

While the efficiency of economic arrangements is the primary focus of economic research, we may ask whether the efficiency improvements that have been experienced in the developed economies have been accompanied by increased vulnerability of output to catastrophic events. In order to address this question usefully, we need some implementable measures of vulnerability of output to disruptive events or large shocks. This study attempts to provide some rudimentary measures of this potential increased vulnerability in economic systems. To do so we draw on concepts from information theory, robust system design and, indirectly, robust statistics to define a measure of the robustness of production, and apply the measure to some cases of interest.

Keywords: Entropy, redundancy, robust design

Suggested Citation

Galbraith, John W., The Robustness of Economic Activity to Destructive Events (May 1, 2009). CIRANO - Scientific Publications Paper No. 2009s-22, Available at SSRN: https://ssrn.com/abstract=1504077 or http://dx.doi.org/10.2139/ssrn.1504077

John W. Galbraith (Contact Author)

McGill University - Department of Economics ( email )

855 Sherbrooke St. W
Montreal, Quebec H3A 2T7
Canada

Center for Interuniversity Research and Analysis on Organization (CIRANO) ( email )

2020 rue University, 25th floor
Montreal H3C 3J7, Quebec
Canada

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