As images of the Sept. 11 attack flash across television screens, many Americans wonder if the country's economy will continue to lie among the rubble in lower Manhattan.
Top scholars in the University's economics department will gather to discuss that question in a panel titled "The Economic and Financial Aftermath of the Terrorist Attack on America" today in McCosh 50.
Economics professor Alan Blinder, who founded the Center for Economic Policy Studies, said he will moderate the discussion and will be speaking on "the likely or possible impact of this tragedy on the U.S. economy and . . . what we can do about it."
Blinder served as a member of former President Clinton's Council of Economic Advisers, and later, from June 1994 to Jan. 1996, was the vice chairman of the Federal Reserve.
"Based on past experiences of unsettling events," Blinder said, "one would anticipate a decline in consumer spending."
He added that such spending has been "the main prop holding up the economy right now."
Blinder also noted that there might be "a severe increase in oil prices . . . stemming from the U.S. retaliation."
Other members of the panel will be economics professor Peter Kenen, who will bring the "international dimensions" into the discussion, said Wilson School professor Swati Bhatt, who organized the event.
Kenen has also been a consultant to the Council of Economic Advisers, the Federal Reserve, the International Monetary Fund and the U.S. Treasury.
Economics professor and former vice president of the financial strategies group at Goldman, Sachs and Co. Jose Scheinkman will be discussing "the impact on the financial markets," Bhatt said.
Scheinkman said the effects of last week's events on the economy have not been positive.
"The market participants have been very nervous," he said, describing the economic atmosphere as full of "unknowns."
Scheinkman also said that because of these uncertainties, it is difficult to predict what will happen to the job market.
"I think it's a little bit early to talk about . . . how the job market will be affected," he said.
Economics professor Paul Krugman, who writes a twice-weekly column for The New York Times, completes the panel. He has also served on the U.S. Council of Economic Advisers.
Bhatt said Krugman will speak on monetary and fiscal policy as well as the political dimension of the attacks.
Krugman said the economy is especially unpredictable right now.
"It will be frantic," Krugman said of the economic changes that continue to occur. "I had a piece in The New York Times that will have to be completely rewritten in light of what just happened."
"The basic thrust is that the terror attack isn't a big deal, economically," Krugman said in an e-mail. "But we were in a fairly tricky situation. Plus we had boxed ourselves into a fiscal corner with the tax cut."
Krugman said other national economies are in trouble, citing Japan as an example.
"What we should do is . . . interest rate cuts plus temporary surge in government spending, What we'll actually do, God knows."
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