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.
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