Clayton-Matthews predicts short-run economic impact from the Boston Lockdown is similar to a snowstorm

What the Boston Lockdown Might Cost

By YUVAL ROSENBERG | The Fiscal Times | April 19, 2013

The manhunt for the remaining Boston Marathon bombing suspect has largely shut down the city and its surrounding areas, as authorities asked residents in Boston and a number of nearby neighborhoods to stay indoors.

Boston Logan International Airport remained open and was operating under “heightened security,” according to the Massachusetts Port Authority, but the Massachusetts Bay Transportation Authority suspended all public transportation, and businesses large and small told employees to stay home. Utility National Grid closed its facilities in the affected communities and told employees to work remotely, a spokeswoman said, but its crews in the area will work with local authorities to respond to any emergency situations. Schools including Boston College, Boston University, Harvard University and the Massachusetts Institute of Technology, where authorities said a campus patrol officer was shot and killed by the bombing suspects last night, all cancelled classes.

Not all business activity was shut down. “At the direction of authorities, select Dunkin’ Donuts restaurants in the Boston area are open to take care of needs of law enforcement and first responders,” Karen Raskopf, chief communications officer of Dunkin’ Brands, said in an emailed statement.

The Boston metropolitan area had a GDP of nearly $326 billion in 2011, according to data from the Bureau of Economic Analysis released in February. That makes the city and its surroundings the ninth largest metro area in the U.S., with an economy larger than those of Greece, Finland, Singapore, Portugal or Ireland.

It’s far too early to get a complete sense of the economic impact of Monday’s bombings and the subsequent manhunt, but a simple – or simplistic – calculation based on that $326 billion figure suggests that shutting down the area for a day could cost the regions’ economy about $1 billion. That doesn’t account for productivity lost nationally as workers tune into to TV news or other outlets to follow the unfolding events.

But today’s economic activity isn’t necessarily lost – it might just be delayed, similar to the effects from the blizzard that hit the area in February, says Alan Clayton-Matthews, a professor at Northeastern University who studies the region’s economy. “People on salary haven’t really lost any income,” he says. Restaurant and retail workers might not be getting paid for shifts affected by the shutdown, but they could make up for that in the near future. “The short-run impact is pretty much like a snowstorm,” says Clayton-Matthews, “which is kind of odd given how horrific and surreal this situation is.”

The most significant long-run economic impact, if there is any, may come from increased security costs, both in Boston and nationally, particularly for open-air events. “More resources will need to be put into making events secure,” Clayton-Matthews says, “and that takes away resources from other uses that might have led to higher growth in the future.”

Read more at http://www.thefiscaltimes.com/Articles/2013/04/19/What-the-Boston-Lockdown-Might-Cost.aspx#eKRtEpqGVGDh3hWe.99

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