In fact, natural disasters and wars are both human disasters. They will damage or even destroy some basic elements of an economy. Casualties and capital losses will inevitably reduce commodity production and service consumption, which will have a significant impact on a country's economic development in the long run. In the "9. 1 1 incident", the consequences caused by terrorist activities are no less than natural disasters such as floods and earthquakes.
In people's memory, only 50 people were killed in the Los Angeles earthquake in 1994, and the economic loss was about 40 billion dollars, while the Kobe earthquake in 1995, with 6500 casualties and economic loss of15 billion dollars. In particular, the Kobe earthquake in Japan directly hit the Japanese economy, making it difficult for the Japanese economy to improve at least for three years. According to the research of economists at Brookings College in the United States, the earthquake had a great impact on Japanese economic circles in the short term, but after 1 week, people's mood began to calm down, and rebuilding their homes was the top priority. The problem is that it happened in Japan shortly after the Tokyo subway gas incident, and this terrorist activity suddenly hit the consumer confidence in Japan. Under the pressure of the above two natural and man-made disasters, Japan's economy has been devastated. In fact, stimulated by the Japanese government's fiscal policy, the Japanese economy experienced an annual growth rate of 1.6% in 1995. Imagine, if there were no such natural and man-made disasters, would the Japanese economy be much better now?
Contrary to Japan, the Los Angeles earthquake was the beginning of California's economic recovery. During the four years from 1998 to 1999, the state's economic growth rate maintained a high level of 6.9%. The American Council of Economic Advisers has analyzed the economic impact of more than 20 natural disasters in the country since 1970, and the results show that the economic losses caused by these disasters are less than 1% of GDP. Therefore, to some extent, the impact of natural disasters on the economy seems to be far less than in the past. After all, natural disasters last for a short time and the affected area is limited.
However, war is another matter completely, which is essentially different from natural disasters. No matter from the scale, duration, or psychological impact on people, it far exceeds natural disasters. For example, after the outbreak of the 1990 Gulf War, American consumer confidence declined rapidly and oil prices soared. At that time, the United States was in a state of low economic growth as it is now, and the Gulf War dragged the already weak American economy into recession.
More importantly, war or the expectation of future war will make private investment stagnate, and no investor will blindly invest in an uncertain future. So the decline in production and consumption is an inevitable trend. Among them, the standard to measure this uncertainty is the so-called "risk premium". Morgan Stanley's recent research shows that during the Second World War, the "risk premium" almost increased by 1 times compared with that before the war, reaching as high as 9%, while the "risk premium" index dropped immediately after the end of the Second World War. This shows to some extent that there is indeed some economic connection between war and investment.
At the same time, after the outbreak of war, the government's public expenditure will inevitably increase. On the other hand, it seems to stimulate a country's economic development. However, history and facts have proved that the economic prosperity created by war is superficial and unsustainable. Therefore, the risk of war that this military attack on Afghanistan may bring will be enormous.