Surveying the Global Economy: A Conversation with Carla Hills and Martin FeldsteinIssue: Fall 2002
The National Interest: May I begin, please, by asking each of you your view of what has happened, or not happened, since this past September 11 that may be described as out of line with the early post-attack expectations of economic analysts?
Martin Feldstein: After September 11 of last year, you will recall that stock markets collapsed, and the reason was obvious: People were afraid. Consumers worried that the U.S. economy would go into a tailspin, and businessmen worried that such expectations would create a self-fulfilling prophecy. In fact, the economy did very well. It has since slowed down, but this is part of a normal cyclical pattern. I don't think we can attribute very much to September 11 insofar as broad economic effects are concerned, and I think this does run contrary to many expectations at the time.