Mordechai Kreinin estimated Wednesday that the economic recovery costs from the Sept. 11 attacks will be $100 billion - a relatively small amount.
During the Forum on the Economic and Financial Implications of September 11, Kreinin told about 200 students and faculty that the economy will likely recover in a year or so.
To varying degrees, the forum’s six other panelists agreed.
“We are going to have to learn to live with threats and adjust to it and the economy will bounce back,” said Kreinin, a professor of economics. “I think we are going to remain the leaders of the world, there is just no alternative.”
One of the many attending students enticed by an extra credit opportunity, Eric Ziegler said he was surprised at how informative the forum was.
“I thought it would be a real drag, lasting for two hours, but with the changing speakers it was interesting,” the general business and pre-law freshman said.
Other students said they were relieved to hear experts talk about economic recovery because they’ve heard about a continuing downturn in the media.
Robert Rasche, a senior vice president and director of research at the Federal Reserve Bank of St. Louis, said students looking at the job market shouldn’t be discouraged by unemployment levels, which are greater than 5 percent.
Rasche said levels were still significantly higher in 1995.
“The normal state of the economy is not recession,” he said. “A year from now we will likely be looking back at a slowdown, not looking forward to more.”
Rasche, who talked about how the Federal Reserve has quickly recovered from the liquidation of assets they saw in the days following the attacks, said reaction from across the country is similar to what he has seen in East Lansing.
Rasche is a former MSU economics professor.
“As far as student population is concerned, while uncertainty has increased, I can think of historical examples where it was probably a lot scarier,” he said.
The drafts and massive military efforts associated with the Vietnam conflict and World War II posed a greater threat to college student’s livelihood than the current conflict, Rasche said.
MSU President M. Peter McPherson drew on his experience as the former deputy secretary of the U.S. Department of Treasury to give an overview of the economic impact.
In the short term, McPherson said the attacks had a negative effect on an already slowing economy. In the long term, he said the country will reexamine its unprotected borders and take a more active leadership role in globalization.
“I think these panels are excellent,” he said. “We have got the expertise here, we probably should put together more of them.”
