The damage that Hurricane Harvey has caused shall take several months for the US economy to deal with. However consensus shows that this natural disaster won't have a dramatic effect on the US economy growth even though major cities such as Houston has been brutally flooded by Harvey. According to AccuWeather Hurricane Harvey damages is set to about $160 billion dollars, which would set it as the most expensive natural disaster to ever occur in US history. Other estimates seem to cost much less, but rising, according Bloomberg, Harvey is set to cost around $75 billion dollars in economic losses. The damages rose up $33 billion dollars the previous day. Gasoline prices have skyrocketed from the Hurricane. For example, AAA reported that the …show more content…
In class we discussed how difficult it is to grant demands such as water, gasoline, and food are very scarce. Government organizations such as FEMA often take weeks to arrive at locations where hurricanes left catastrophic damage. But if price gouging was legal many wouldn't be struggling with supply shortages or have a hard time finding supplies. Considering the demand for the product will go down due to the high prices which helps those who truly need it. Often times, many people question the prices because it seems very greedy, but it isn't because scarcity of that item is really high. Also in order to obtain these supplies some drive hundreds of miles to acquire supplies. Economist Russ Roberts points out that if stores don't raise their prices the supplies would disappear and often times the consumer often times buys more than what they need leaving those who truly need it …show more content…
According to Cox Automotive over a half a million cars and trucks have been scrapped. Auto insurers will deal with several claims for several months after Harvey has hit. According to David Rosenberg the chaired economist at Gluskin Sheff says that it's a good time for investors to bet against their stocks because many of the damages caused by the Hurricane should put Americans back into the work force due to a high volume of demand for jobs and stocks like Home Depot rose up two percent due to the supplies needed to do repairs on the damages caused by Harvey.
The second article covers Venezuela and their inflation crisis, which has risen over 700%. In the article it discusses how adopting a currency board system would make the Bolivar a reliable currency such as a dollar. The currency board issues notes and cons convertible on demand into a foreign currency at a fixed rate of exchange. For reserves, it has a slow risk, interest bearing bonds that denominated in the currency. The law sets the reserve levels to equal to 100%. Currency boards create profits from the difference interest it earns on its reserve assets and the cost of maintaining