Prices are up, up, up!

As America is trying to recover from a recent string of natural disasters, including the devastating hurricane Katrina, prices are increasing, and all facets of the economy are feeling the affects. Consumers have experienced some of the highest price increases ever within the energy industry. In fact, the Price Article states that gasoline prices have gone up nearly 18 percent! In addition to rising prices throughout the economy, hundreds of thousands of people remain jobless because of the recent hurricanes. With people out of work, prices on the rise, and the current state of inflation looming over the nation, it seems that people’s ability to purchase has gone down, which has ultimately affected numerous industries throughout the nation, and the World. While it is impossible to predict when, or where a natural disaster will strike, it is nearly as difficult to foresee how the economy will respond after such a disaster. From an economic standpoint, natural disasters have the potential to change countless areas of the economy, including employment, supplies of commodities, consumer demand, and society’s overall purchasing power, proving that natural disasters have externalities that extend much further than the rubble surrounding destroyed homes, and buildings.