September 2, 2008
Hurricane Gustav hit the U.S. Gulf Coast on Monday with far less force than Hurricane Katrina did three years ago, but its economic bite could be worse as it hits a national economy that is far weaker than the one battered by Katrina in 2005.
Economists agree that in the long run, a major hurricane or other natural disaster can actually help lift economic activity because of insurance payments and federal assistance.
In the short-term, the destruction and the disruptions can be a hit to the economy.
EQECAT, a firm that estimates losses for the insurance industry, said Gustav could end up causing between $6 billion and $10 billion in insured losses. That amount is a fraction of the $41 billion in insured losses caused by Katrina three years ago, but still enough to make it among the ten most costly storms in U.S. history.