Hurricane Harvey Benefitted GDP?
Jack Marks
Hurricane Harvey was a tragic event that left the city of Houston and its many residents in ruins. The hurricane took a toll on the people of Houston, as well as it left a monumental amount of property damages behind as well. Many people believe that all of these property damages would lead to a negative impact on the United States economy and more specifically regarding the GDP (Growth Domestic Product), but personally I think these damages will be much less severe than people believe. (Video showing how the effects of Hurricane Harvey)
The Texas Gulf Coast plays a central role in American energy production. The Gulf Coast is the center for oil drilling, refining and chemicals manufacturing. This is why many people believe that Hurricane Harvey would have lead to a big hindrance in the supply and production of these goods. However oil prices have not spiked since the tragedy occured which leads me to believe that the damages that occurred, may not leave the drastic impact many people believed it would. (Irwin, Neil. “Markets Are Signaling That Hurricane Harvey Won't Crush the Economy.”)
The destruction of the hurricane left a need to rebuild and repair many buildings around the state of Texas. Ironically this could lead to a positive bump in economic output in the coming months as new buildings and companies would be transformed and rebuilt. In result generating a higher GDP. Not many people would believe that you would be better off after your state gets bombarded by a hurricane, but ironically that is how the math works out!
Some data does show however that gas prices have spiked as much as 9 percent since the natural disaster(Irwin, Neil. “Markets Are Signaling That Hurricane Harvey Won't Crush the Economy.”)This can be credited to refining capacity being shut down during the storm. However this type of price swing is not abnormal and happens routinely. Also prices have not creeped any higher than what they were at during last July. Hurricane Harvey did leave a minor impact as gas prices have minorly increased, however this is routine and gas prices haven't sky-rocketed like many believed they were going to do.
The impact of Hurricane Harvey on the city of Houston and the people of Houston was undeniable. However contrary to what many people believe the hurricane only modestly impacted the economy and more specifically GDP. After the Hurricane Harvey hit there was not a spike in oil prices, the price of gas moderately increased, and GDP in the state of Texas is destined to increase in the coming months. This is why I believe that Hurricane Harvey left a much larger effect on the people of Houston instead of the United States Economy.
Works Cited
Costa, Pedro Nicolaci . “There's a Reason Economic Measures Are No Good at Capturing the Likely Damage from Hurricane Harvey.” Business Insider, Business Insider, 28 Aug. 2017, www.businessinsider.com/hurricane-harvey-will-have-modest-gdp-effect-but-that-means-little-2017-8.
Irwin, Neil. “Markets Are Signaling That Hurricane Harvey Won't Crush the Economy.” The New York Times, The New York Times, 28 Aug. 2017, www.nytimes.com/2017/08/28/upshot/markets-are-signaling-that-hurricane-harvey-wont-crush-the-economy.html?rref=collection/timestopic/Gross Domestic Product (U.S.)&action=click&contentCollection=timestopics®ion=stream&module=stream_unit&version=latest&contentPlacement=7&pgtype=collection.
Liesman, Steve. “Hurricanes Irma, Harvey Will Have a Significant Negative Impact on Third-Quarter GDP Growth.” CNBC, CNBC, 13 Sept. 2017, www.cnbc.com/2017/09/13/the-hurricanes-will-have-a-significant-negative-impact-on-third-quarter-gdp-growth.html.
Very interesting article! Hurricane Harvey for sure left so much negative damage and severe effects to the people of Houston and the buildings, materials in that city. It's very interesting how you believe that the damages will be much less severe than people believe. From your argument, although the Hurricane left large amounts of damage and money needed to repair the damage, I see the positives to this natural disaster. The rebuilding of the companies will allow for the companies to become more "modernized" and popular to the consumers, only bringing in sales. The total value of goods produced and services provided in a country during one year, the GDP may decrease however, as products and services were ruined in the disaster. However I do believe that it is benefiting the people of Houston, Texas.
ReplyDeleteThis is an interesting post because I didn't think about it that way. I thought about the people having to rebuild and the amount of money the people need to pay for repairs on their houses. I did notice the gas prices go up but they still didn't skyrocket like people expected. The GDP does increase because people are buying more things and building house increases the GDP. I liked how you Incorporated what we are currently learn.
ReplyDeleteIt was very interesting to see how such a devastating natural disaster could actual have a positive effect on the economy. Hurricane Harvey had such a negative effect on the people of Texas destroying hundreds of building, cars, and even taking some lives. However, it is good to see the the GDP increases which makes sense once you look at the statistics. Unfortunately the gas prices did rise a bit, but like you mentioned they did not increase by a large amount. All in all, Hurricane Harvey was a very devastating, but did actually increase the GDP.
ReplyDeleteI think this is a good example of why GDP may not always be the best indicator of economic health or human happiness. As you mentioned, the hurricane appears to affect the people of Texas more negatively than the American GDP; money spent is money spent, no matter the purpose of the expenditure. GDP fails to take into account the negative effects of natural disasters, which reduces its effectiveness as an indicator.
ReplyDeleteI agree with Janie completely. While it is shown that the GDP increases during the aftermath of a hurricane, that is no way to judge the well being of a country. This case especially exemplifies that although typically a rise in GDP usually is a sign of country prosperity and good quality of life, you cannot make those assumptions because the GDP does not contain enough information.
DeleteThis is a very interesting topic and one not a lot of people think about. I would never think that a natural disaster could have a positive effect on the economy. It is good that there can be positives found in the situation like the GDP increasing when you look at the statistics. The flaw is that GDP doesn't take into account the negative effects of the disaster. Again, very interesting to see GDP go up after a negative event occurred.
ReplyDeleteI agree kolton, I would never have thought that such a big disaster could positively effect the economy. Crazy to think that the GDP could go up after a negative event. Its good to know that you can find a positive out of such a bad situation. Great blog jack, loved reading it.
DeleteI enjoyed this post because with just a glance at the title, you would disagree, how could natural disasters possibly benefit the GDP? However, all the rebuilding and repairs actually bumped the economy of Texas, how interesting! Now I do agree with you and many others that Hurricane Harvey was a tragic event, but it actually did boost the GDP.
ReplyDeleteGoing off what Hunter said, I did enjoy this post a lot as I feel like it truly shows the different and provocative affects that natural disasters can have on our country in many different ways. This is definitely not the typical result we would think of after a natural disaster and it is so interesting to see how many financial and economic effects these huge disasters cause. Overall this was a great blog and I enjoyed reading it!
DeleteThis blog was really interesting Jack! Nobody would ever think that such a devastating, negative event could actually benefit the economy. It is crazy to see that Texas has already bounced back with a boost in their GDP. One reason that I think they'll see a boost in GDP is because a lot of business buildings were destroyed it is going to force those companies to have to rebuild everything so its brand new. Everybody these days love modern businesses because of how quickly we are making advances in technology. So I think the new buildings are actually going to help companies feel more professional and modern and actually help them bring in more revenue. Great article Jack.
ReplyDeleteI think it's very interesting to see how the property damage and impact on human lives is juxtaposed against the small economic changes caused by this hurricane. While small economic growth certainly wasn't worth the devastation of the hurricane, looking at natural disasters from the economic side of things can be very interesting, and it really provides a perspective that I didn't initially have about this natural disaster. I also think that this shows that sometimes looking at GDP does not give a definitive answer of how well off people are. On the one hand, lots of businesses being built will contribute to the GDP, and this may lead to people thinking that Texas is doing better than ever. However, this isn't true, and if we look closer we can see how despite small economic growth, the lives of many have been torn apart.
ReplyDeleteI agree, I think it was a tragic event that most people saw as a horrible event but somehow something good came out of it. More jobs were needed to help clean up the wreckage which not many people would have thought that it woulds increase the GDP. Surprisingly that would mean more people got jobs out of the even then lost because they could not live there anymore.
ReplyDeleteThis is a very interesting connection to the disaster of Hurricane Harvey. Naturally, a large natural disaster such as Hurricane Harvey, is going to have a huge negative effect on the people in the region in which the disaster takes place. However, because of this hurricane, there is now an increased amount of attention directed towards Texas. Furthermore, since Texas is part of a country with resources available to them, they were able to rebuild their communities because of that national attention, and in the long-run, prosper off of the now modernized cities.
ReplyDeleteThis posts perfectly explains the downfalls of using GDP as the sole indicator of a good economy. While the GDP is and certainly will continue to rise in the wake of the hurricane, I am certain that no person or policy maker would view this as a positive way to correct the economy. The graph was also very interesting to see, because the outpouring of support and news coverage made Harvey seem as if it nearing the level of Katrina when it came to damage, when in fact it does not even rank near the top.
ReplyDeleteThis is a very interesting viewpoint, the amount of structural damage caused by the hurricane Houston, it is evident that new infrastructure will need to be built. The creation of new building is what will make the big impact on the GDP as millions of dollars must be spent on the creation of these buildings. Although tragic, the hurricane could have a silver lining as the local economy will get a boost, as many contractors in the area will have tons of newfound business opportunities.
ReplyDeleteVery interesting to see your point of view! It is good to know that there are not all totally negative outcomes from such a tragedy like a natural disaster. Although the people living in Texas are now devastated because of their loss of personal items, their homes, and more, after rebuilding and modernizing their cities I bet they will appreciate the new communities. I also agree with Seth's comment. We see a rise in GDP as people try to recover from the hurricane, but this is not a good way to determine the state of their economy.
ReplyDeleteIt is amazing how much hurricane Katrina affected the "Growth Domestic Product"-Jack Marks. I do understand how a natural disaster could hurt the GDP exponentially as rebuilding is not an output but is necessary and can cost a lot of money.
ReplyDeleteI agree with you in how Hurricane Harvey could have actually been less severe because when you mentioned that when buildings and other structures were knocked down, workers can indeed build them up again to get the GDP back up to normal. From the graph provided, it shows that the cost of the damages due to the hurricane was small in relation to the economy, so it doesn’t look like it is as affected as Hurricane Katrina.
ReplyDeleteI agree that Hurricane Harvey could have ended up being less severe than previously thought, however, I think it is bold to say that something actually benefited from this disaster. I also agree with Seth's comment; it's very interesting how the media blew up when discussing Hurricane Harvey and comparing it to Katrina, when in reality, it did not even come close.
ReplyDeleteI am surprised by the statistics you presented. I would assume that the Gross Domestic Product would drastically decreased after the Hurricane. Although localized in the city of Houston, the entire nation was socially and emotionally impacted. We had to supply the victims with basic necessities, and eventually, need to work on the relief and renewal of the community. This makes sense, however. If there are new buildings being built with money that is existent, the infrastructure will grow, and the GDP will rise in a few months. Although a time of crisis, the economic standpoint sheds light on the situation.
ReplyDeleteEven though the people of Houston were more directly impacted by Hurricane Harvey than the United States economy as a whole, the natural disaster still caused a lot of damage to the city and to its’ specific economy. People needed to rebuild houses and business and also, people needed basic supplies such as gas and oil to be able to transport materials for these builds. This costs a lot of money and was hard to get into the disaster area at the time. So although the US economy as a whole didn’t suffer dramatically, the lives of people in Houston were made tremendously more difficult and more expensive as a result of the hurricane.
ReplyDeleteI am thoroughly surprised to see that the U.S. economy didn’t experience significant decreases, because after all, they have an essential contribution in categories such as oil drilling, refining, and chemical manufacturing--as you said. I was even more shocked to see that in fact, the GDP had a slight increase. Although this natural disaster was evidently a tragedy, an increase in GDP gives the people hope for improvements in other sections. Maybe this is a good opportunity for outdated business to modernize their focus and facilities? Maybe the surge in gas prices will intensely dip as the economy recovers? Overall, new demands will be present during this time of grief, which may surge production in undiscovered areas. As of right now, the economy (and the people) of Houston can only get better.
ReplyDeleteI think this shows that their is flaws in using GDP to measure a god economy. I bet most people of Houston don't care that the GDP and just want to work on fixing the damage.
ReplyDeleteI would have never expected that a hurricane could have a positive ending result after an occurrence. Although the GDP rises, I think the calculation of the GDP is faulty and not a good way to measure an economy. The calculation of the GDP excludes certain aspects that would effect the outcome of the GDP. Personally if I were in the people's shoes who went through this dangerous disaster I wouldn't care about the GDP i would be focusing on reconstructing my life again and figure out how to restart when most of the stuff I would own is destroyed.
ReplyDeleteI think it was really interesting that took this approach to the Hurricane Harvey aftermath, I definitely wouldn't have expected this outcome especially after this hurricane was the most expensive natural disaster in US history, at about $160 billion. However, one thing that you could've done to make your argument even more compelling would be to compare it to the losses/gains of other major hurricanes in US history, like Hurricane Katrina for example, just to compare how it has affected the GDP, gas prices and oil prices alongside other similar natural disasters.
ReplyDeleteIt's great that you noticed this occurrence in the economy. I'd usually think that a natural disaster would force more money & resources to be spent on repairs and medical care, thus negatively impacting the GDP. Yet after hurricane Harvey, it wasn't the case. But it's great that the GDP is positively increasing, because now citizens can focus on rebuilding their homes and businesses with no worry of a crashing/weakened economy that could leave them homeless.
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