Market Power

Musings by an academic economist on the power of markets and the power over markets.

Tuesday, December 28, 2004

Natural Disasters

No Virginia, the tsunamis are not a good thing for the economy. The tsunamis have killed tens of thousands of people. That is not a good thing! Sure enough, the tsunamis will cause an increase in business for those available to work in the construction industries in the nations so horribly affected by the waves, but that business comes at the expense of other activities that would have occurred in their absence. If people thought that they would be better off by having their property destroyed and rebuilt, we expect that they would have done this in the absence of the tsunamis.

I guess I don't get a free donut.