One of the critical requirements for disasters to show up as a positive impact on flow variables (like GDP) is that the damage they do to stock variables isn't so great that it impairs normal economic processes. That's obviously not a foregone conclusion, and there's a lot to worry about with subway damage in NYC.
Arnold Kling has a dour forecast here.
Here's another possibility (this doesn't change anything Arnold says about the subway). Maybe this will be a big boost to telecommuting and virtual workplaces. Obviously this is only relevant for a part of the workforce, but I suspect a lot more work could be done virtually than is in actuality. I could have done almost all my Urban Institute work from home. Face-to-face meetings are nice but I did some conference calls and that worked fine. Kate teleworks on and off and as long as she's not doing training she could do her entire job from home. To some extent a lot of face time in the office is purely out of tradition.
Then again, I wouldn't mind seeing a big federally funded infrastructure investment in the eastern U.S. either.
Tuesday, October 30, 2012
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LOTS of pushback in Arnold's comment section.
ReplyDeleteWhat has been the long run impact on LA of that big earthquake they had in the 90s? Anyway, I think his pet theory way over estimates how flexible businesses are wrt moving. Also, he seems to take it for granted that the complexity of the interlocking systems isnt matched by institutions that can manage them (i.e. its telling that the first comment is about lazy and incompetent union workers).
ReplyDeleteI cant find gas! Whether Arnold Kling is right or not I don't want to be living here during the zombie apocalypse!
ReplyDeleteAlthough, this reminds me a criticque I have of that post, which is that a lot of the supply chain disruptions are from the suburbs/outside the city, so its not like if Goldman Sachs moved to New Jersey or conneticut they would necessarily be much better off. Anyway, a lot of the places that were thinking about moving out of lower manhattan did after 9/11/
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