But whether the economy as a whole wins or loses is up for debate. Some analysts are arguing that Sandy could act as a kind of grisly stimulus package, mostly thanks to the billions of dollars that will be spent repairing flood and wind damage. The idea isn't totally out there: unemployment in post-Katrina New Orleans actually fell in the aftermath of the storm. And some academics say that reconstruction after storms in well-prepared areas can boost the economy.
But storms in general, and this one in particular, rarely deliver the kind of stimulus Keynesians are hoping for this week.
One-off catastrophes tend to have a negligible long-term effect on the larger economy, positive or negative, even when there is a tragic human cost. In the aftermath of Hurricane Katrina, while regional unemployment dipped, national GDP growth slowed, if only slightly, says Erwann Michel-Kerjan, co-director of the Wharton Risk Management and Decision Processes Center. Sandy, orders of magnitude smaller, will hardly register on the national radar.
Tuesday, October 30, 2012
More meme watch
Wait. How come they don't get to "buck the trend" like we do?