The price America paid for the September 11 attacks

When the planes hit the twin towers eight years ago this week, I wasn’t a journalist at all, but a business economist living in London. It was my job to look at what was happening to the economy and figure out what it might imply and what might happen next. Alongside the shock experienced by anyone watching the television coverage, I felt bewilderment. It seemed that the sheer physical destruction and the deaths of so many highly skilled people would have to disrupt the running of the US economy – one of Osama bin Laden’s declared objectives. But with no close precedents, it was hard to say by how much.

Early estimates suggested that the economic cost alone might be grievous. The International Monetary Fund’s World Economic Outlook, published three months after the attacks, thought that losses to the US economy could total $75bn. Others thought the economic damage would be greater. Robert E. Looney, a professor at the Naval Postgraduate School, estimated in 2002 that direct costs exceeded $27bn but the effect of the disruption might total $500bn. A study by the New York City Comptroller’s Office estimated that the city alone would lose a cumulative $58bn between 2001 and 2004 as a result of the attacks.

The remainder of the article can be read here. Please post comments below.

The Undercover Economist: a guide

Publishing schedule: Excerpts from "The Undercover Economist" and "Dear Economist", Tim's weekly columns for the FT Magazine, are published on this blog on Saturday mornings.
More about Tim: Tim also writes editorials for the FT, presents Radio 4's More or Less and is the author of "The Undercover Economist" and "The Logic of Life".
Comment: To comment, please register with, which you can do for free here. Please also read our comments policy here.
Contact: Tim's contact address is:
Time: UK time is shown on posts.
Follow: A link to the blog's RSS feeds is at the top of the page.
Follow on Twitter
FT blogs: See the full range of the FT's blogs here.