Harvey and Irma Have Global Market Implications
Path of destruction.
Photographer: Chip Somodevilla/Getty ImagesThe term “butterfly effect” was coined to describe how a hurricane’s intensity could be influenced by the fluttering of a distant butterfly’s wings. In the wake of the recent devastation by Harvey and Irma, we may have to contend with the widespread reverse impact that hurricanes could have on global financial markets.
The human tragedy of lost lives and the millions who were dislocated by the floods is only one consequence of the natural disasters. The financial press has also noted the likely dip in U.S. economic growth in this current quarter due to lost productivity, offset by a pickup in jobs and production in the final quarter of the year. This would make it seem that there will be no lasting effect on the economy or markets.