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Economic impact of Japan's earthquake and tsunami
UTICA, N.Y. (WKTV) -In this global economy, we are affected by events across the world. We've seen examples of just that at the pump, where gas prices as rising with turmoil in the Middle East. The earthquake and tsunami in Japan could also have an impact on our economy.
While the damage in Japan is still being evaluated, economists are already forecasting how the U.S. will feel the financial aftershocks of the earthquake.
Zhaodan Huang is an Assistant Professor of Economics at Utica College. He's looking at the situation from all angles, and he thinks that with the supply chain disrupted in Japan, U.S. automakers like Ford and GM could see short term benefits.
Japan's economy has been stagnant for many years, with the government worrying about deflation, but soon Japan might see short term inflation.
Meanwhile, investors who have put money into Japanese bonds are likely to see high volatility in the coming weeks. However, when it comes to oil, there could be some temporary relief, with a surplus on the market.
The events of Friday morning could also spark a boost for U.S. businesses that manufacture materials that will be needed to reconstruct homes and other buildings.
"I'm still waiting to see, but I believe maybe, you are going to see some inflation, steel prices rise up, copper prices rise up, and aluminum prices are going to be getting higher and higher," Huang says.
Professor Huang says most of the economic effects of the natural disaster will only be felt short term.