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re: Are natural disasters good for the economy?
Posted on 8/20/16 at 8:32 pm to TypoKnig
Posted on 8/20/16 at 8:32 pm to TypoKnig
There's really only 2 "good" things that come from a natural disaster.
1. Typically communities come together and help each other out and put all the other bullshite that we allow to divide us aside and our humanity and compassion comes back for a little while.
2. Transactions of cash and goods and an influx of federal disaster dollars along with insurance payouts helps move inventories for a bump in revenues but the net is a negative in production in most cases. So the quick uptick in economic velocity is more of a mask than anything.
1. Typically communities come together and help each other out and put all the other bullshite that we allow to divide us aside and our humanity and compassion comes back for a little while.
2. Transactions of cash and goods and an influx of federal disaster dollars along with insurance payouts helps move inventories for a bump in revenues but the net is a negative in production in most cases. So the quick uptick in economic velocity is more of a mask than anything.
0
Posted on 8/20/16 at 8:39 pm to TypoKnig
Another state's economy usually. But no, insurance premiums rise, building material prices go up, resources that would have been spread out are now centralized in mostly one industry, people have to pull from things like savings/retirement to get back on track - later becoming an economic burden, etc. There are probably a hundred other things that could be listed.
Posted on 8/20/16 at 11:36 pm to TypoKnig
What about companies that will just move their corporate offices to other states now? Or companies that had before considered LA as a corporate location and now are rethinking that?
Part of NOLA's recovery after Katrina is they are a city known and loved from all over the world. People all over the world wanted to help the city recover.
Part of NOLA's recovery after Katrina is they are a city known and loved from all over the world. People all over the world wanted to help the city recover.
Posted on 8/20/16 at 11:40 pm to TypoKnig
No
Posted on 8/20/16 at 11:45 pm to TypoKnig
Id say no. There's no doubt it will create money for businesses and individuals and people will get jobs out of it, etc. But the effect of individuals and small businesses on even small economies these days is negligible from a financial/economical perspective.
Posted on 8/21/16 at 1:00 am to TypoKnig
People throw around the broken window fallacy but it isn't that simple.
Whether or not it is a net benefit to the area impacted depends on the source of the funds. If they're coming from true, disposable income, then it can be an issue. If the money is coming from savings, insurance, or the federal government, those are all dollars that wouldn't be spent otherwise.
In essence, if the money has to be pulled from more productive avenues in order to rebuild, it is a net negative. If the money is coming from less productive places, or places that wouldn't even exist without the disaster, it can be a net positive.
There have been economic studies that suggest disasters can and often are good in the short and long term. The broken window fallacy makes sense logically, but in reality it doesn't always pan out.
Whether or not it is a net benefit to the area impacted depends on the source of the funds. If they're coming from true, disposable income, then it can be an issue. If the money is coming from savings, insurance, or the federal government, those are all dollars that wouldn't be spent otherwise.
In essence, if the money has to be pulled from more productive avenues in order to rebuild, it is a net negative. If the money is coming from less productive places, or places that wouldn't even exist without the disaster, it can be a net positive.
There have been economic studies that suggest disasters can and often are good in the short and long term. The broken window fallacy makes sense logically, but in reality it doesn't always pan out.
This post was edited on 8/21/16 at 8:37 am
Posted on 8/21/16 at 2:08 am to TypoKnig
Local yes.
Why?
Because out of state money pours in.
It's the same economic principle as to the SuperBowl or Mardi Gras boosting the economy.
However, it has nil/negative effect on the economy at large.
Why?
Because out of state money pours in.
It's the same economic principle as to the SuperBowl or Mardi Gras boosting the economy.
However, it has nil/negative effect on the economy at large.
Posted on 8/21/16 at 8:22 am to TypoKnig
When you mean "the economy" do you mean economic activity? Of course it is good. When lots of wealth gets destroyed people want to rebuild.
That destruction of pre-existing wealth is of course a very real loss for those that had it.
Whether the disaster was good for you or not depends on your own situation I guess. Katrina was terrible for someone retired and owning his/her home. It was great for a contractor who lived in BR. Whether it was good for "people in general" is a meaningless question.
That destruction of pre-existing wealth is of course a very real loss for those that had it.
Whether the disaster was good for you or not depends on your own situation I guess. Katrina was terrible for someone retired and owning his/her home. It was great for a contractor who lived in BR. Whether it was good for "people in general" is a meaningless question.
This post was edited on 8/21/16 at 8:25 am
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