Years ago, when I was working at the Minneapolis Fed, there was a drought in the midwest. It was a major event there, everyone was concerned. So as the local economists, we were asked: What was the impact on the state’s economy? We looked at it from every direction we could think of, but the answer was always the same: within roundoff error of zero.
We could say the same of Hurricane Sandy. It’s having a significant impact on our lives, at least for a few days, but the impact on (say) fourth quarter GDP will be approximately — wait for it — zero. You can expect to see more articles like this one, but the correct answer will still be zero.
