What is the real Economic impact of Hurricane Sandy?

Having been in New York over half term it was easy to see how the economic impact from the recent hurricane might run into the billions. For a start, the markets were closed in New York on both the Monday and the Tuesday of the hurricane. Shops were shut (lost retail sales), offices were closed (lost productivity), homes and important infrastructure were damaged causing huge costs for firms, households and insurance companies. Governments have to spend millions on co-ordinating relief and clean up efforts; all of which led to an estimated cost of $30-50 billion.

But do these disasters really cause long term economic damage?

Clean up efforts and rebuilding create jobs  and encourage spending which contribute towards growth, and projects begin to improve old or outdated and damaged infrastructure leading to figures which suggest any change in GDP is only temporary. The following article provides an interesting argument as to whether the longer term economic effects of such a disaster on the US economy are really as bad as many people think......http://www.businessinsider.com/hurricane-sandys-impact-on-the-us-economy-2012-11

POSTED BY MAH