The earthquake that struck the Japanese port city of Kobe in the early morning of January 17, 1995, was the most severe quake ever to strike a modern urban area. In this article, I offer an overview from an economic perspective of Kobe 19 months after the event and what has been learned since. Events both preceding and following the quake are analyzed in terms of basic economic concepts. Though hardly novel, this perspective is seldom applied systematically to natural disasters. Doing so, I think, will yield some useful implications for disaster management policies in Japan and other countries in any stage of economic development.