The economic issues
Abstract
Expectations are a major factor in economic behaviour. If we
expect prices to rise, we buy now rather than later, increasing the
demand for goods and ensuring that their prices will indeed increase.
If we expect share prices to fall, and act on that premise, share
prices will fall. Expectations of an economic recovery will stimulate investment and speed the recovery. They are, to a degree, self-fulfilling.
This has obvious implications for earthquake prediction. If the prediction is believed, it will have economic consequences. In this paper I suggest that the economic consequences of such a prediction may be as important as the impact of the earthquake itself.