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No natural disaster is complete until it touches off a debate among economists.
As the Northeast continues to clean up from Hurricane Sandy, dueling economists are assessing the storm's effect either as a year-long boost to the domestic economy or as a diverted use of capital that could have been better used elsewhere.
According to the Financial Times, Goldman Sachs "estimated that while the storm would reduce GDP growth by up to 0.5 percentage points in the fourth quarter, it would add 'slightly more' than that to growth in the first quarter of 2013." The company's chief economist, Jan Hatzius, said there would be "slightly stronger" growth beginning in November and into the first few months of 2013, according to Forbes.
University of Maryland economist Peter Morici was more bullish, writing for Yahoo! Finance that "rebuilding after Sandy, especially in an economy with high unemployment and underused resources in the construction industry, will unleash at least $15 billion to $20 billion in new direct private spending - likely more as many folks rebuild larger than before, and the capital stock that emerges will prove more economically useful and productive."
Diana Swonk, chief economist at Mesirow Financial, described the hurricane as a "perverse stimulus" on a MoneyWatch podcast. While acknowledging that there were "winners and losers" in the hurricane's aftermath, she said, "Much of it is infrastructure spending, the subways, all the electrical grids, roadways and all the overtime on that," all of which will be spent quickly...