The Economic Effects of 9/11: A Retrospective Assessment

The tragedy of September 11, 2001 was so sudden and devastating that it may be difficult at this point in time to write dispassionately and objectively about its effects on the U.S. economy. This retrospective review will attempt such an undertaking. The loss of lives and property on 9911 was not large enough to have had a measurable effect on the productive capacity of the United States even though it had a very significant localized effect on New York City and to a lesser degree, on the greater Washington, D.C. area. Thus, for 911 to affect the economy it would have had to have affected the price of an important input, such as energy, or had an adverse effect on aggregate demand via such mechanisms as consumer and business confidence, a financial panic or liquidity crisis, or an international run on the dollar.