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'The Economic Aftermath of September 11th' A Forum Moderated by Dean Stephen Bosworth, Fletcher School of Law and Diplomacy
By Jeff Gardner


(Medford, MA. 10/1/01)…Dean Stephen Bosworth moderated a panel of faculty from the Fletcher School of Law and Diplomacy and Tufts University today discussing the impact of the World Trade Center and Pentagon attacks on the U.S. economy. While the panelists agreed that the terrorist attack has contributed to reduced consumer

More Links... Academic Dean Lisa Lynch  Economic Impact Unclear  Boston Globe business reporter Ross Kerber spoke with Lisa Lynch Sept. 30, 2001 Professor of Economics Gilbert Metcalf  Professor Michael Klein Professor Drusilla Brown Professor Karen Jacobsen

confidence in the economy, they did not view it as a major influence on the economic decline, which has been developing over the past year. 

Fletcher Academic Dean Lisa Lynch commented that it was likely that the U.S. economy would meet the official definition of a recession in January when the report on the final quarter of 2001 is released. At the same time, she voiced cautious optimism in reminding the audience that tools exist to manage the economy, including the Fed’s ability to pump money into the economy through continued lowering of the prime rate. Lynch, a former Chief Economist for the U.S. Labor Department said the consensus is that the Fed will further reduce the rate to 2.5% in October and that that could somewhat offset losses in consumer confidence.

Tufts Professor of Economics Gilbert Metcalf argued for an overall economic stimulus program that avoids getting caught up in special interests trying to grab a ride on the nation’s economic program. He also commented – with agreement from the other panelists - that with the precipitous drop in the equity markets, social security privatization is now dead.

Returning to the issue of consumer confidence, Fletcher Professor Michael Klein stressed that the long-term impact of the September 11 terrorist attack will depend on whether it is only the first shot in a sustained war. If so, Klein believes it will contribute to further weaknesses in consumer confidence. Klein added that “the attack created a ‘supply shock’ but one that had a relatively small ripple effect on the world economy.” 

The discussion moved to consideration of the role of trade policy in overall foreign policy development in the United States with Tufts Associate Professor Drusilla Brown suggesting the likelihood of the U.S. initiating trade concessions for developing nations. Brown put special emphasis on Pakistan, a country interested in concessions in textiles trade and a country obviously of great importance in the fight against terrorism. In this scenario, Brown argues that international trade policy becomes an essential part of American foreign policy.

Feinstein Famine Center Professor Karen Jacobsen moved the discussion to immigration and refugee issues. She reminded the audience that immigrants in America have traditionally played an important part in the development of the country’s economy and that that will continue. She did raise what she considers the need for the U.S. to tighten its immigration laws but is convinced that such tightening should not and would not be based on race or religion. She also commented that the refugee flow from Afghanistan will in all likelihood include – in addition to refugees – representatives of security, military and terrorist organizations.

The panel was one of a series at Tufts and the Fletcher School designed to provide greater understanding of the impact of the September 11 terrorist attacks.