The Effects of 9/11 on the US Economy

The Effects of 9 /11 on the US Economy

The terrorist attack of September 11 , 2001 on the World Trade Center New York City resulted in huge losses of life and property and had a major impact on the economy of the United States . The US economy due to the 9 /11 terrorist attacks can be studied on the nature of costs involved (direct or indirect ) and on the time period (short term , medium term and long term . As the immediate and direct costs are the most evident ones , the immediate impact of the tragic

br event of September 11 on the US economy is the one that can be best calculated and understood whereas longer term calculations will be based on indirect costs and hence will involve various assumptions . There were many casualties and material damages on a horrific scale and Lower Manhattan lost approximately 30 percent of its office space and a large number of businesses . Approximately 200 ,000 jobs were destroyed or relocated out of New York City , at least temporarily . The destruction of physical assets was estimated in the national accounts to amount to 14 billion for private businesses 1 .5 billion for state and local government enterprises and 0 .7 billion for federal enterprises . Rescue cleanup and related costs have been estimated to amount to at least 11 billion for a economists have opined that most of the effects of the 9 /11 attacks were limited to the New York metropolitan area

The estimated NYC economic loss is in two parts - a one-time wealth loss and a continuing loss in jobs and Gross City Product (GCP . For the purpose of calculating the impact on GCP , losses are calculated from September 2001 to the end of 2004 .Gross City Product Impact . Real GCP losses by calendar year were 11 .5 billion in 2001 (last three months in 2001 ) and 15 .8 billion in 2002 , for a period from September 2001 through 2002 . The range of loss over 2003-2004 is 25 billion to 37 billion . The cumulative range of GCP impact is therefore 52 .3 billion to 64 .3 billion

When we consider the loss of wealth , two factors need to be considered both fixed and human capital . According to estimates by The Comptroller the impact of the WTC attacks on the City 's wealth as 30 .5 billion , of which 21 .8 billion is the cost (replacement value ) of lost buildings infrastructure and tenant assets and 8 .7 billion is an estimate of the present value of the future earnings of those who died . The WTC Towers alone cost 6 .7 billion . They were built for about 1 billion in the early 1970s . But the cost to rebuild the WTC complex in 2003 would be 6 .7 billion

The insurance industry had to shell out an estimated 40 billion for loss of life , property damage and business interruption caused by the terrorist attacks , according to the Insurance Information Institute . The terrorist attack thus had a high impact...