How economy changes when earthquakes, hurricanes,floods, and so on wreak havoc on a region's economy by causing catastrophic loss of life and loss of valuable resources, such as food, water and housing. Extremely violent storms or geological events like earthquakes and volcanic eruptions can wipe out bridges, roads and destroy rail and airport systems, disrupting commerce.
Natural disasters also spur inflation. Prices for many commodities, such as food, lumber and other building materials, often soar after a natural disaster causes widespread destruction. In the weeks after Hurricane Katrina hit the Gulf Coast, prices for lumber, panels and particle board soared by as much as 50% and remained high as demand for rebuilding materials competed with demand from the country's already overheated housing market.
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I agree with this fact, when there is a high demand and a shortage of supply the product will have a high price. And the price inflation can be either a long term or a short term affect in both of supply and demand. In the case of hurricane Katrina and Rita in 2005, the supply was disrupted so there was a short term demand for the gasoline was exceed the supply on hand and put upward pressure on prices. And buyers all over the country, even those outside of the Gulf of Mexico region were affected as well.
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