IMPACT OF 9/11 ATTACKS ON ECONOMY

INTRODUCTION (BY LOVEPREET KAUR(B)-MB 74)

Key economic indicators reflected this tightening: industrial production reached a peak in June 2000 and slowly began to decline, the two consumer confidence indexes peaked in May 2000 and the unemployment rate began to rise, reaching 4.9% in August 2001, with initial shock causing global stock markets to drop sharply. The attacks themselves caused approximately $40 billion in insurance losses, making it one of the largest insured events ever. The September 11 attacks also led indirectly to the U.S. wars in Afghanistan and Iraq, as well as additional homeland security spending, totaling at least $5 trillion. In international and domestic markets, stocks of companies in some sectors were hit particularly hard. Travel and entertainment stocks fell, while communications, pharmaceutical and military/defense stocks rose. Online travel agencies particularly suffered, as they cater to leisure travel.

DISCUSSION (BY ANUJ MEHTA(A),MB 12)

Major areas affected in economic perspective:

Ø The losses included business interruption ($11.0 billion), property ($9.6 billion), liability ($7.5 billion),workers compensation ($1.8 billion), and others ($2.5 billion).

Ø Some pre-economic difficulties due to the break in commodities future trading and losses from delayed shipments of perishable goods by air and by truck along U.S., Canada and Mexico.

ØDollar denominated assets after 9/11; it would appear that there was a short run decline in the net purchase of U.S. assets by foreigners.

Ø Overlaid on a labor market already weakened by recession were 462 extended mass layoffs attributable to 9/11 that displaced nearly 130,000 employees.

Ø A large number of transatlantic flights landed in Gander in Newfoundland and in Halifax,Nova Scotia, with the logistics handled by Transport Canada in Operation Yellow Ribbon. To help the industry, the federal government provided an aid package to the industry, including $10 billion in loan guarantees, along with $5 billion for short-term assistance.

Ø The thousands of tons of toxic debris resulting from the collapse of the Twin Towers contained more than 2,500 contaminants, including known carcinogens.

Ø In Germany, two major anti-terrorism packages were enacted. Britain passed the Anti-terrorism crime and security act 2011 and the Prevention of terrorism act 2005. Similarly, New Zealand enacted the Terrorism suppression Act 2002.

REFERENCE-WIKIPEDIA

Conclusion (BY MANIK MAHAJAN(C),MB 139)

Among the major conclusions is that 9/11 is more appropriately viewed as a human tragedy than as an economic calamity. In the final analysis it may be difficult to separate the effects of the terrorist attacks from the then on-going recession. The economic impact of terrorism can be calculated from a variety of perspectives. There are direct costs to property and immediate effects on productivity, as well as longer term indirect costs of responding to terrorism. These costs can be calculated quite minutely; calculations have been made about how much money would be lost in productivity.