Identifying the Regional Economic Impacts of 9/11

It is difficult to separate the individual effects of the recession and the 9/11 attack. Within this severe constraint, the national economic impact of 9/11 appears to have been both modest and short-lived. This is supported by the sharper decline in industrial production in 2001 than in 2002. At the regional level, the impacts seem to be more in the form of regional relocational shifts (to New Jersey). The New Jersey decline in 2002 was almost certainly a recession rather than a 9/11 impact, because New Jersey gained in 2001. New York City is a little different from other spatial units because it held up better in the period preceding the 2001 recession. There are differential sectoral impacts both regionally and nationally, e.g., finance and business services vs. manufacturing. Our results show only one significant change; the effect of Finance and Insurance sector on Professional, Scientific, and Technical services.