Essay - Disrupting America's Economic System Is A Fundamental Objective of Terrorists...

disrupting America's economic system is a fundamental objective of terrorists

Abstract:

Even as the world continues to struggle with ***** terrible shock from the September 11 attacks in New York and Washington, one principle lesson has already become clear: disrupting our economic ***** is a fundamental objective of *****.

Prior to September *****, our ***** environment was certainly not immune to terror, in compar*****on to many other nations; we lived relatively *****-free. Now, however, the aftermath of the terrorist attacks serves as a grim reminder that international relations and security developments can dramatically affect economic performance.

US History is replete with countless examples when macro *****s are overtaken by what economists refer to as, exogenous shocks—surprise events ***** can profoundly and often unpredictably shift political and economic resources, and send even the most accurate forec*****ts astray. Commodity shocks, such as the two OPEC jolts in the 1970s, are cl*****sic examples of this kind of economic shock. In fact, throughout much ***** the past century, wars, labor strikes, currency market turmoil, and major natural disasters have all proven to be quite destabilizing ***** real US economic activity.

Never*****less, what ***** the real potential economic perils associated with an event like the September 11, 2001, terrorist ***** upon ***** *****? In other words, aside from the immediate economic consequences of that event, what are the likely, longer-term, systemic implications for the economy, now that President Bush ***** formally declared a "War on Terrorism? The balance of this essay will look for some answers to ***** question. Specifically, this treatise will concentrate its focus on ***** of the direct, significant *****hips between these types ***** events, and their resultant impact ***** leading ec*****omic indicators.

***** Impact of Exogenous Events upon US Leading Economic Indicators

Overview:

As a member of President Clinton's Council ***** Economic Advisers, H*****rvard economist Jeffrey Frankel examined in 1998 the risks to the ***** from the computer glitch dubbed ***** "Y2K bug." Frankel's study reviewed 20 major disasters in the ***** between 1971 ***** 1995. The events included riots in Miami ***** 1980, ***** Mount St. Helens eruption in the same year, and a 1993 winter s*****rm ********** 24 Eastern states. The report concluded that diversion of ***** to replace buildings, for example, had only "a limited impact on current sales and production," he found.

***** American economy is large, diverse, ***** resilient, and people ***** find ways around those disruptions...." Frankel noted in an annual report of Mr. ***** economic advisers. "Then there is a rebound," added business-cycle expert Victor Zarnowitz, an economist who authored a similar ***** for the New York-based Conference Board. For a major natural disaster - such as Hurricane Andrew in 1992 or the Northridge, Calif. earthquake ***** 1994—the impact barely show up ***** the national statistics on output or unemployment for the year.

The closest match to the September 11 disaster may be the 1990 Gulf War after Iraq invaded Kuwait. In that event, a recession had started a month before ***** US *****