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The Economic Consequences of Terror: A Brief Survey

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Author Info

  • Tilman Brück

    ()
    (German Institute for Economic Research (DIW Berlin))

  • Bengt-Arne Wickström

    ()
    (Humboldt University of Berlin)

Abstract

This brief survey reviews the economic consequences of terrorism. It is argued that the indirect effects of terrorism are likely to outweigh the direct effects. The former include changes in risk, transaction costs, demand, public finances and growth. We also address the nature of anti-terrorist policy and of policies reducing the negative impact of terrorism. The former can change the incentives for terrorists to break with social conventions or maximize the costs of conducting terrorism. The latter is particularly important as badly designed policies could enhance the negative economic effects of terrorist actions.

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Bibliographic Info

Paper provided by Households in Conflict Network in its series HiCN Working Papers with number 03.

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Length: 13 pages
Date of creation: Apr 2004
Date of revision:
Handle: RePEc:hic:wpaper:03

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Web page: http://www.hicn.org

Related research

Keywords: terror; terrorism; security policy;

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References

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  1. Garfinkel, Michelle R., 2004. "Global threats and the domestic struggle for power," European Journal of Political Economy, Elsevier, Elsevier, vol. 20(2), pages 495-508, June.
  2. Chen, Andrew H. & Siems, Thomas F., 2004. "The effects of terrorism on global capital markets," European Journal of Political Economy, Elsevier, Elsevier, vol. 20(2), pages 349-366, June.
  3. S. Brock Blomberg & Gregory D. Hess & Akila Weerapana, 2004. "An Economic Model of Terrorism," Conflict Management and Peace Science, Peace Science Society (International), Peace Science Society (International), vol. 21(1), pages 17-28, February.
  4. Hubert Strauß, 2001. "Assessing the Effects of the Terrorist Attacks on the U.S. Economy," Kiel Working Papers, Kiel Institute for the World Economy 1077, Kiel Institute for the World Economy.
  5. Brauer, Jurgen & Gomez-Sorzano, Alejandro & Sethuraman, Sankar, 2004. "Decomposing violence: political murder in Colombia, 1946-1999," European Journal of Political Economy, Elsevier, Elsevier, vol. 20(2), pages 447-461, June.
  6. Martin Neil Baily, 2001. "Economic Policy Following the Terrorist Attacks," Policy Briefs, Peterson Institute for International Economics PB01-10, Peterson Institute for International Economics.
  7. Gupta, Sanjeev & Clements, Benedict & Bhattacharya, Rina & Chakravarti, Shamit, 2004. "Fiscal consequences of armed conflict and terrorism in low- and middle-income countries," European Journal of Political Economy, Elsevier, Elsevier, vol. 20(2), pages 403-421, June.
  8. Drakos, Konstantinos, 2004. "Terrorism-induced structural shifts in financial risk: airline stocks in the aftermath of the September 11th terror attacks," European Journal of Political Economy, Elsevier, Elsevier, vol. 20(2), pages 435-446, June.
  9. S. Brock Blomberg & Gregory D. Hess & Akila Weerapana, 2002. "Terrorism From Within: An Economic Model of Terrorism," Claremont Colleges Working Papers, Claremont Colleges 2002-14, Claremont Colleges.
  10. Mueller, Dennis C., 2004. "Rights and citizenship in a world of global terrorism," European Journal of Political Economy, Elsevier, Elsevier, vol. 20(2), pages 335-348, June.
  11. Nitsch, Volker & Schumacher, Dieter, 2004. "Terrorism and international trade: an empirical investigation," European Journal of Political Economy, Elsevier, Elsevier, vol. 20(2), pages 423-433, June.
  12. Patrick Lenain & Marcos Bonturi & Vincent Koen, 2002. "The Economic Consequences of Terrorism," OECD Economics Department Working Papers, OECD Publishing 334, OECD Publishing.
  13. Sandler, Todd & Enders, Walter, 2004. "An economic perspective on transnational terrorism," European Journal of Political Economy, Elsevier, Elsevier, vol. 20(2), pages 301-316, June.
  14. Eldor, Rafi & Melnick, Rafi, 2004. "Financial markets and terrorism," European Journal of Political Economy, Elsevier, Elsevier, vol. 20(2), pages 367-386, June.
  15. Frey, Bruno S. & Luechinger, Simon, 2004. "Decentralization as a disincentive for terror," European Journal of Political Economy, Elsevier, Elsevier, vol. 20(2), pages 509-515, June.
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Cited by:
  1. Paul Benjamin & Carola Gruen, 2006. "The Regulatory Efficiency of the CCMA: A Statistical Analysis of the CCMA’s CMS Database," Working Papers, University of Cape Town, Development Policy Research Unit 06110, University of Cape Town, Development Policy Research Unit.
  2. Gul, Tayyeba Gul & Hussain, Anwar Hussain & Bangash, Shafiqullah Bangash & Khattak, Sanam Waghma Khattak, 2010. "Impact of Terrorism on Financial Markets of Pakistan (2006-2008)," MPRA Paper 41990, University Library of Munich, Germany.
  3. Bassil Charbel, 2013. "Macroeconomic Consequences of War and Terrorism in Lebanon," Peace Economics, Peace Science, and Public Policy, De Gruyter, De Gruyter, vol. 19(3), pages 415-429, December.

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