How the Boston Bombing Affected the Economy (Essay Sample)

How the Boston bombing affected the Economy
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How the Boston bombing affected the Economy
A bombing, considered as a terrorist attack, leads to the taking of precautions by the United States cities, which assist in the capturing of those suspected of the attack, and also the protection of the citizens. There tends to be a mass mobilization of many resources that lead to a grand economic cost, and thus attention tends to be veered towards security. This calls for a shutdown of businesses, and as we all know businesses tend to be the root of economic activities. These activities are brought to a standstill. They include such activities as tourism, transportation, trade and even the energy sector.
After the Boston bombing, there was a vast economic impact felt as most of its Metropolitan area tended to be shut down so that the Tsarnaev brothers would be captured. It is evident that this area tends to be the ninth largest area in the nation, and it tends to boast a larger economy as compared to other European countries like Portugal, Ireland and Greece. It is clear that to shut down this area with the much economic magnitude will come at one high economic cost. According to HIS Global Insight, Jim Diffley states that the measure price per day tends to amount to three hundred and thirty three million dollars. The estimate tends to be considered to be arrived at after the deduction from Boston’s economic normal production that tends to amount to about one billion dollars per day. Pressure tends to be, therefore, subjected to the authorities to capture the suspected felons so that the economic activities in the city continue. It is normally difficult to view economic concerns during a time of extreme sadness and grief, but it is of excellent significance to anticipate recovery (Moshehai, 2013).
An example of economic turmoil is the La Voile restaurant located on Newbury Street Boston’s upscale. The fillet de boeuf in this restaurant tends to go for forty seven dollars. Dinner traffic has been seen to fall off sharply as the bombs tended to leave the city so shaken. The individuals no longer dine out in the night nor celebrate. They tend to prefer to stay at home during the hard time. The terror attack on Boston tended to leave many questions as compared to answers, and police officers tended to isolate a twelve block area, which was located in the city’s heart of hotel and retail district. The bomb attack created a measurable impact on the United States economy after the business and consumer confidence was severely traumatized. The long term impact of the economy and business proves difficult to assess. Due to the attack the individuals of Boston and more than twenty eight million international and domestic tourists who tend to visit the historic hub in New England every year tend to think twice on showing up or attending the large public gatherings (Schoen, 2013). One of these gatherings includes the one hundred and seventeenth running marathon that tended to be the target in the terror attack.
It is evident that the local businesses in surrounding towns and the city itself tend to come to a halt as the suspects are being chased down. The network tended to report a miniature of effects on normal commerce of terrorist attacks. It has affected tourism in many countries as has been prominent. According to Harper, the insurance coverage has tended to become complicated for these terrorist attacks. Through a study, these attacks were seen to cost the United States more than three billion dollars. It only cost Al-Qaeda a mere five hundred thousand dollars to abolish the World Trade Centre and weaken the Pentagon. The New York Times newspaper answers the question on what the U.S has been cost, by stating that, it has spent about seven million dollars for every dollar that the Al- Qaeda has spent in its plans and implementation of the attacks. The factors include homeland security, physical damage, reduced travel, business interruptions and overseas war funding among others. These sums up to a fifth of the existing national debt and not all the cost is incurred by the government (Harper, 2013).
The marathon itself tended to generate on its own about one hundred and forty million dollars in revenues for shops, local hotels, restaurants and even other businesses. The marathon alone will not be affected rather other events that tend to take place in the summer. Individuals will tend to remember the vivid picture of a bomb exploding at the sidewalk, and they from that moment on be acutely cautious of crowds and avoid movement where possible. It is evident that if the security concerns tend to give pause to external convention planners, the larger metro area’s three hundred and twenty five billion dollar economy would tend to suffer. This delay in the recovery of Boston’s economy depended on the capture of the terrorists (Sivy, 2013).
The Dow tended to drop following the tragedy by one thousand four hundred points. It required more than two months for the Dow to even. The Dow tended to be one thousand five hundred points down during the time of the attack from the year’s high. There was found to be other factors that favored the stock prices as the market made up its losses and tended to gain an extra one thousand. The bombing also affects the energy sector and an industry that tends to be very vulnerable to terrorists is gas and oil. Demand and supply tend to be closely related in that there is truly little flexibility in both. If there should be impairment in any part of the supply of the oil, the inelastic market tends to suffer substantial price swings. It is found that a terror premium as it is called is added to the cost of oil in the case of a terrorism threat. A study performed by experts concluded that the premium can run from two dollars to ten dollars a barrel. When inculcated to the size of the market, it tends to read as from between sixty billion dollars and three hundred billion dollars (Harper, 2013). Terrorist activity that tends to threaten the development of the world’s supply of oil tends to be considered tremendously grave and may lead to military response that would then be massively expensive.
The bombing also disrupted the financial system in that New York City’s financial activity was upset, that included the stock market. The longest market shut down since the year 1933 was experienced that lasted a whole four days (Schoen, 2013). To magnify the effects more, a number of brokerages and banks were also brought to a standstill. If repeated multiple times or on a large scale, any form of a terrorist attack tends to have long term economic effects. An example of multiple bombings at a couple of train stations tend to upset rail user travel all over the country. A string of attacks in shopping malls on the other hand, has a grand impact on the retail sales. Creation of uncertainty enhances the economic effects prolonged even way after the attacks have subsided.
Most of the incidents tend not to rise to levels of causing long term economic turmoil that is taking into account the hope that the bombing in Boston’s Marathon is not followed by various multiple similar attacks. The blast in London where the terrorists targeted a bus and three trains preceded and seven hundred individuals were injured and fifty two killed. In Germany, France and U.K. share prices tended to fall rapidly by three to four percent, but the stocks tended to recover before the daily trading came to a halt. In the United States, the stock market really closed higher. Certainly, those attacks that tend not to be fixated on certain vulnerable targets like the financial system or supply of oil tend to dispel equally fast. Half of these attacks were found to have a meaningful impact on the stock market after a study of the al-Qaeda terrorist attacks, and their effects tended to be felt fully within about an hour (Moshehai, 2013). The Boston Marathon bombing’s impact on the economy and markets was not viewed as a long lastin...