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.
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