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Causal Linkages Between Domestic Terrorism and Economic Growth

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  • Thomas Gries
  • Tim Krieger
  • Daniel Meierrieks

Abstract

We use the Hsiao--Granger method to test for terrorism--growth causality for seven Western European countries. In bivariate settings, the impact of economic performance on domestic terrorism is very strong. In trivariate settings, the impact of performance on terrorism diminishes. In general, we find that economic performance leads terrorist violence in robust ways only for three out of seven countries. Terrorism is almost never found to causally influence growth in bivariate and trivariate specifications. Our findings indicate that the role of economic performance in determining terrorist violence appears to have been important for some countries, whereas all attacked economies have been successful in adjusting to the threat of terrorism.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Defence and Peace Economics.

Volume (Year): 22 (2011)
Issue (Month): 5 (June)
Pages: 493-508

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Handle: RePEc:taf:defpea:v:22:y:2011:i:5:p:493-508

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References

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Citations

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Cited by:
  1. Friedrich Schneider & Tilman Brück & Daniel Meierrieks, 2010. "The Economics of Terrorism and Counter-Terrorism: A Survey (Part I)," CESifo Working Paper Series 3011, CESifo Group Munich.
  2. Shahbaz, Muhammad, 2013. "Linkages between inflation, economic growth and terrorism in Pakistan," Economic Modelling, Elsevier, vol. 32(C), pages 496-506.
  3. Dorsett, Richard, 2013. "The effect of the Troubles on GDP in Northern Ireland," European Journal of Political Economy, Elsevier, vol. 29(C), pages 119-133.
  4. Muhammad, Shahbaz & Muhammad, Nasir Malik & Muhammad, Shahbaz Shabbir, 2011. "Does economic growth cause terrorism in Pakistan?," MPRA Paper 35101, University Library of Munich, Germany, revised 30 Nov 2011.
  5. Tim Krieger & Daniel Meierrieks, 2011. "Terrorist Financing and Money Laundering," Working Papers CIE 40, University of Paderborn, CIE Center for International Economics.
  6. Firat Bilgel & Burhan Can Karahasan, 2013. "“The Economic Costs of Separatist Terrorism in Turkey”," AQR Working Papers 201314, University of Barcelona, Regional Quantitative Analysis Group, revised Nov 2013.
  7. Shahbaz, Muhammad & Shabbir, Muhammad Shahbaz & Malik, Muhammad Nasir & Wolters, Mark Edward, 2013. "An analysis of a causal relationship between economic growth and terrorism in Pakistan," Economic Modelling, Elsevier, vol. 35(C), pages 21-29.
  8. Shahbaz, Muhammad & Shabbir, Shahbaz Muhammad, 2011. "Is hike in inflation responsible for rise in terrorism in Pakistan?," MPRA Paper 31236, University Library of Munich, Germany, revised 29 May 2011.

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