This year, Cuba has spent more than a day in the dark at a time due to rolling blackouts caused by fuel shortages. Harris Public Policy’s Koichiro Ito and his co-authors investigated the impact of such nationwide blackouts on the economy. They study specifically a 2025 blackout in Chile and find that the blackout caused economic transactions to fall by about 35 percent on the day of the outage. About half of that decline rebounding in the following four days, resulting in about $36 million in total lost economic activity.
The rebound indicates that many people and businesses waited to make sales and purchases until after the blackout. So Ito and his co-authors broke down how different sectors of the economy faired, finding that sectors selling durable goods that could be sold later like cars, hardware and agricultural materials were hit hard on the day of the blackout but quickly recovered. For example, car sales dropped by 60 percent on the day of the blackout but rebounded by 52 percent in the following days, leaving a net decline of 8.5 percent. In contrast, sectors selling time-sensitive or perishable goods like food stores or pharmacies saw smaller initial declines but more persistent losses. For example, supermarket sales fell by 25 percent on the blackout day and recovered by only 9.8 percent in the days after, leaving a net decline of 15.5 percent.