Week One Discussion | Course Paper

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In January of 2010, then-House Speaker Nancy Pelosi said that the recent earthquake in Haiti could be

“an opportunity for a real boon economy in Haiti.” Others have postulated that the Indonesian tsunami

and the Japanese earthquake would turn out to be good for the local economies. Do you agree or

disagree? Support your answers with the economic concepts in this week’s textbook readings.

I disagree that a natural disaster could be a benefit a small size economy like in Hiati. I can see how one

may think that the influx of people assisting the country after the disaster would benefit because of

short term job growth, but that influx in jobs and aid for the country usually is unsustainable and the

negative impact lasts years past the positive rebuilding effort.

With regards to economic principles discussed in Economics, the Production Possibilities Frontier (PPF)

model relates to this topic. This model says that if you are investing everything into one area of the

economy, then you cannot invest in other areas because all resources are spent in the one area that you

are investing everything into. If the country is investing everything in rebuilding efforts, then nothing will

be going to business or other areas of the economy and these parts of the economy no longer have the

chance to thrive. This speaks to the fact that, for a less robust country to sustain long term economic

growth, they will have to invest equitably in the economy during times of natural disasters.

As pointed out in the question and this article (http://www.businesspundit.com/the-economic-impact-

of-natural-disasters/) Japan seems to have made a quick recovery after their 1995 earth quake. One

must appreciate that Japan had a robust economy before the disaster and Haiti’s economy was not the

same. It is essential to keep in mind that the impact overall to the economy is less in an area like Japan,

than it would be in Haiti, because the estimated cost of the disaster is a larger percentage of the overall

wealth of the country.

This New York Times (http://www.nytimes.com/2008/07/08/business/worldbusiness/08iht-

disasters.4.14335899.html) article mentions that after a hurricane in Florida in 1992, the country saw a

positive effect on the economy because of the increase of jobs. It is important to keep in mind that

because Florida is a part of a first work country, it is more desirable to continue to live in after the

rebuilding or construction is concluded, unlike Haiti.