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Essay on Human Resources - How 911 Affected the Economy
Business people around the globe are hoping that, after the terrorist attacks on the World Trade Center and Pentagon, the financial world finally will get back to normal. But the immediate darkened pall September 11 cast over the international business community is unlikely to brighten anytime soon. The negative impact rippled through every level of business, organizationally and individually. And, if anything, the overall impact on the economy is deepening .
The World Trade Center was a major center of economic activity—a huge concentration of services, inputs, labor, capital, managerial skills. The destruction of the physical facilities, the stock of capital—the sheer number of firms that had their records and computers there—is a clear first effect. Like all major disasters, natural or manmade, the terrorist attacks of September 11 resulted in a tragic loss of life and destruction of property, as well as short-term disruption of economic activity. In addition, because of the size and premeditated nature of the attack, there are likely to be more lasting effects in some industries and segments of the U.S. economy.
Conceptually, the economic costs to the United States stemming from the 9/11 terrorist attacks can be broken down into several categories, largely depending on their nature (direct and indirect) and on the time period examined (immediate, short-term, medium-term and long-term). Those costs that are short run and direct are clearly the easiest to identify and measure. Estimates covering longer periods of time and focused mainly on indirect costs require numerous assumptions concerning counterfactuals and hence are on less firm ground. Another area of controversy involves the anthrax scare following the attacks. The estimates below treat this as a separate event, although in some of the indirect cost estimates this factor may have had an influence.The first thing to realize is that the economy was weakening even before the terrorist attacks......
