Could Superstorm Sandy Stimulate the Region's Economy?

Abel, Jaison R.; Bram, Jason; Deitz, Richard; Orr, James A.; Sattar, Kaivan K.; Stern, Eric

Discussion Paper

Could Superstorm Sandy Stimulate the Region's Economy?

Abstract: The New York metro region’s recovery from Superstorm Sandy is well under way. Spending on restoration and rebuilding activities following a natural disaster is a potentially powerful economic stimulus to the affected area. Indeed, money from outside the region—in the form of federal aid and private insurance payments—flowing to the damaged areas in the region gives a temporary boost to economic activity. But does this mean that Sandy—along with the federal aid and insurance payouts associated with it—was actually good for the region’s economy? In this post, we examine the nature and magnitude of the stimulus the New York metro region is receiving as it recovers from Sandy and provide some thoughts on how the economy may be affected over the longer term by rebuilding activities.

Keywords: Sandy; superstorm; storm; New York; New Jersey;

JEL Classification: R1;