Assessing the Effects of the Terrorist Attacks on the U.S. Economy
AbstractThe terrorist attacks of September 11 have challenged the view that the U.S. economy is on the brink of recovery. This article discusses the effects of the attacks on real GDP taking the Kiel InstituteÂ’s forecast of September 10 as the baseline scenario. The focus is on assessing the direct production losses in the week of September 10Â–16. Anecdotal evidence is combined with economic reasoning (on the non storability of services, the role of air transports and on the complementarity between services). As to the indirect effects, I assume that the downturn in sentiment will be severe but short-lived. Under the technical assumption of a stabilizing political situation economic activity in 2002 will recover more vigorously than previously thought due to postponed purchases and a more expansionary stance of economic policies.
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1077.
Length: 17 pages
Date of creation: Sep 2001
Date of revision:
Business Cycle; U.S. economy; terrorist attacks; air transportation; services;
Find related papers by JEL classification:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
- L80 - Industrial Organization - - Industry Studies: Services - - - General
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
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- Gern, Klaus-Jürgen & Gottschalk, Jan & Kamps, Christophe & Sander, Birgit & Scheide, Joachim & Strauß, Hubert, 2001. "Weltwirtschaft vor dem Ende der Talfahrt," Open Access Publications from Kiel Institute for the World Economy 2654, Kiel Institute for the World Economy (IfW).
- Benner, Joachim & Borbély, Dóra & Gern, Klaus-Jürgen & Kamps, Christophe & Kamps, Annette & Sander, Birgit & Scheide, Joachim & Strauß, Hubert, 2002. "Weltwirtschaft erholt sich," Open Access Publications from Kiel Institute for the World Economy 2743, Kiel Institute for the World Economy (IfW).
- Gern, Klaus-Jürgen & Kamps, Christophe & Scheide, Joachim, 2001. "Rezession in den Industrieländern wird bald überwunden," Open Access Publications from Kiel Institute for the World Economy 2681, Kiel Institute for the World Economy (IfW).
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