As we wait to see the path hurricane Matthew takes over the next couple days, one may wonder about the externalities of such a storm hitting the US. Some potential hit points are, the Carolinas, Georgia, and Florida. The storm has already hit the Bahamas, killing 11 people.
Ignore the fact that Floridians have been told to move inland 100 miles, completely depleting the workforce along the cost, stifling production; Let's look at the storms effects on a company like American Airlines Group Inc. American has halted all flights that arrive in Miami, Fort Lauderdale, and West Palm Beach on Thursday. They expect to have "limited departures from these airports, drastically decreasing the supply of flights out of Florida. This will drive up flight prices across the board (Maybe not at Southwest, which does whatever it wants with prices).
Flights in Georgia and the Carolinas are also being pushed back. The fear here is of the risky nature of flying around storms like Matthew. If the storm hits, and ravages these airports, the supply of American's capital, in this case planes and other equipment) have will be decreased. Workers could potentially see an increase in wages, and companies can expect a decrease in overall productivity following the storm.
Ideally, everyone would like to see the storm veer off, leaving the States alone all together. Hurricanes aren't good for anybody.
Link to Article
from the WSJ
This comment has been removed by the author.
ReplyDeleteHurricane Matthew has prompted airlines to cancel thousands of flights into and out of American airports impacted by the storm.
ReplyDeleteAccording to FlightAware, more than 4,000 domestic flights were canceled from Thursday through Saturday. This includes more than 600 Saturday flights that had already been canceled Friday night.Airlines had previously offered Matthew-related change-fee waivers to areas in the Caribbean hit by the powerful hurricane but are now extending them to cover U.S. airports as well.
The change-fee waivers generally allow customers to make one change to their itineraries without paying additional charges or fares, although each airline has specific conditions associated with changes.
This comment has been removed by the author.
ReplyDeleteHurricane Matthew has prompted airlines to cancel thousands of flights into and out of American airports impacted by the storm. According to FlightAware, more than 4,000 domestic flights were canceled from Thursday through Saturday. This includes more than 600 Saturday flights that had already been canceled Friday night. Airlines had previously offered Matthew-related change-fee waivers to areas in the Caribbean hit by the powerful hurricane but are now extending them to cover U.S. airports as well. The change-fee waivers generally allow customers to make one change to their itineraries without paying additional charges or fares, although each airline has specific conditions associated with changes.
ReplyDeleteDo you think this will impact the labor force positively or negatively with the reconstruction of damage and the destruction of capital causing regrowth to reach the steady-state once again?
ReplyDeleteIf there is minimal damage, will stunt in productivity affect growth and prices in the short run?
In another article about Hurricane Matthew I saw where the South Florida tourism industry has already been dealing with a decline in visitors due to struggling economies and falling currencies in their top three international sources. This makes trips to the U.S. more expensive and the hurricane is just another blow to a section of the country that has been facing some difficulty. I feel like property damage is the common thought when hurricanes are being discussed. So this article brings a different perspective by mentioning the impact a hurricane can have on wages, capital, and specific companies.
ReplyDeleteIt's crazy the impact nature has on the economy. It delays transportation, it affects supply and demand for certain goods, and population. You can't be a hundred percent ready for natural disasters. You can plan, but it doesn't assure safety or guarantee an outcome. This is why economics is not an exact science— there are a lot of unpredictable variables.
ReplyDeleteThis is a good article to blog about, because most people probably don't necessarily think of the affect a hurricane has on the economic side. The fact that workers can't work, people can't travel, and goods can't be produced and supplied, certainly has a negative affect on the economy. Natural disasters such as hurricanes can't really be prepared for, which means the damage and affects that results from them can be very impactful.
ReplyDelete