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International Terrorism: Causes, Consequences and Cures

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  • Graham Bird
  • S. Brock Blomberg
  • Gregory D. Hess

Abstract

A popular view is that international terrorism is on the increase, that it is religiously motivated and that it has important adverse consequences. This paper investigates this view. It examines the empirical evidence on the causes of international terrorism from the late 1960s to the early 2000s and discovers that, while religion has had a part to play, explanations based on economics and politics appear to be consistent with the facts. Terrorists come from relatively poor and undemocratic countries and commit attacks in relatively rich and democratic ones. The paper then examines the micro, macro and global economic effects of international terrorism from both a theoretical and empirical angle, and discovers that the negative effect on domestic aggregate demand is temporary and the effect on aggregate supply insignificant. Finally, the paper explores policies to deal with international terrorism and demonstrates that this is complex. Analogies with conventional crime may be unhelpful. Copyright 2008 The Authors.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal World Economy.

Volume (Year): 31 (2008)
Issue (Month): 2 (02)
Pages: 255-274

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Handle: RePEc:bla:worlde:v:31:y:2008:i:2:p:255-274

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Cited by:
  1. Frey, Bruno S., 2009. "How can business cope with terrorism?," Journal of Policy Modeling, Elsevier, vol. 31(5), pages 779-787, September.
  2. repec:pdn:wpaper:40 is not listed on IDEAS
  3. Friedrich Schneider & Tilman Brück & Daniel Meierrieks, 2011. "The Economics of Terrorism and Counter-Terrorism: A Survey (Part I)," Economics of Security Working Paper Series 44, DIW Berlin, German Institute for Economic Research.
  4. Csaba, László, 2008. "Módszertan és relevancia a közgazdaságtanban. A mai közgazdaságtan és a társtudományok
    [Methodology and relevancy in economics. Today s economics and associated sciences]
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(4), pages 285-307.
  5. Kollias, Christos & Papadamou, Stephanos & Stagiannis, Apostolos, 2011. "Terrorism and capital markets: The effects of the Madrid and London bomb attacks," International Review of Economics & Finance, Elsevier, vol. 20(4), pages 532-541, October.

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