Wednesday, January 13, 2010

Wealth Effects of Disaster

(fm the BC thread "Intensity")

I’m pretty sure they’ll drop below Rwanda in GDP (PPP)

Maybe and maybe not. Let us say that one week ago the population was 10,000,000 with a per capita income of $1,300. All from the wiki so don't yell at me. If half a million are lost and they are disproportionately from the poorest and most vulnerable members of society then the average wealth available for the survivors goes up. In addition if just as a WAG $5 billion gets spent in and around Haiti over the next 6 months by international relief efforts. That would work out to a 30% increase in the net wealth per capita for the survivors. Just as the Black Death of the 14th century increased the available capital per capita for the survivors the earthquake could increase the net wealth of surviving Haitians. Even a tenth of that level of relief aid could have a dramatic effect. It is also possible to consume or steal hundreds of millions of dollars and produce no visible change. The evidence for that is the Palestinians.

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