The Japanese earthquake, tsunami and subsequent nuclear crisis are "expected to inflict more human and physical damage" than the 1995 Kobe earthquake, economists at Barclays Capital said.
The Japanese earthquake, tsunami and subsequent nuclear crisis are "expected to inflict more human and physical damage" than the 1995 Kobe earthquake, economists at Barclays Capital said.

"Based on currently available information, we estimate that damages could exceed JPY15 trillion (3% of gross domestic product)," they said in a lengthy note circulated Tuesday. The affected area accounts for between 6% and 7% of the overall Japanese economy, the world's No. 3 economy.

(This story and related background material will be available on The Wall Street Journal website, WSJ.com.)

"The economy in the affected region is highly open, which means developments within the region tend to have an impact outside the region and vice versa," economists Kyohei Morita and Yuichiro Nagai wrote.

They describe the area affected by the disaster to be a "trading economy," one in which both demand and production are highly dependent on other places, in contrast to the "exporting economy" of the area hit by the 1995 quake, an area that relies mainly on demand from outside but favors products within its economy for its own consumption.

"This suggests the impact of the latest earthquake (compared with the 1995 earthquake) is more likely to spread to other regions and, by extension, the Japanese economy as a whole."

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