Macroeconomic effects of Hurricane Katrina Essay

Macroeconomic effects of Hurricane Katrina - Essay Examplereconstructive memory activities are expected to restore the level of GDP to what it was before Katrina. Loss of wealthiness and hood cod to Katrina would not influence GDP. GDP is a measure of current activities, not a measure of nations wealth. GDP would not capture the economic impingement nor the devastating loss of life and dislocation associated with Katrina (Reed 4).4. Katrinas Effect on the Economic GrowthWhite house economic advisor said in alarming 31, 2005 Hurricane Katrina is likely to have only a modest impact on the U.S. economy as long as the hit to the energy sector proves transitory.3 Congressional Budget Office (CBO) expected Katrina to dampen national (inflation-adjusted) economic growth rate by 0.5 to 1 percent only and reduce physical exertion by about 400,000 in the second half of 2005. CBO anticipated that economic growth and employment are likely to rebound during the first half of 2006 as rebuild ing accelerates (First 3). The following table summarizes the forecast projections (Reed 3). Table 1 Estimated Effects of Hurricane Katrina on Economic Growth.45. Katrinas Effect on the Labor ForceKatrina destroyed the theme of most businesses in the disjuncture soaring. Workers homes were also destroyed and the labor force decreased substantially in the Coast as people evacuated the area. When reconstruction efforts started pumping gold into the region, new jobs started to surface. It would still take time to regain the labor force that existed in the Gulf Coast prior to Katrina. Job losses in the Gulf Coast would overwhelm growth in jobs across the nation (Reed 6). 6. Katrinas Effect on the Consumer Prices and InflationIt is expected that on the short run, consumer prices will rise due to rise in energy prices.... This essay is one of the best examples of analysis of the destructive impacts of Hurricane Katrina on the American economy. Katrina caused the dislocation of many pe ople, who would need housing, access to health care, education for their children, and means to meet their basic needs.Destruction of bridges, highways, residential and business property represent a permanent loss in national wealth and capital. Congress has appropriated $62 billion for Katrina relief activities, which would increase budget deficit. Katrina destroyed the infrastructure of most businesses in the Gulf Coast.Evacuation of the Gulf coast trim back economic activities in the region in the short term, which decreased GDP. Resources that would have been used for investment and spending are now to be used rebuilding. Reconstruction activities generate jobs and income which adds to the GDP. Reconstruction activities are expected to restore the level of GDP to what it was before Katrina. When reconstruction efforts started, new jobs surfaced.Most economic activities came to a halt as a result of the devastation of Katrina. New Orleans flood accounts for almost half of the t otal property damage. Investment in rebuilding the Gulf Coast would allow dislocated inhabitants to return home. Reconstruction activities in the Gulf Coast would help cushion the macroeconomic effect of Katrina. Replacing and rebuilding the capital upset would enable the southern states of Mississippi and Louisiana to regain their abilities to provide their share in national growth.