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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)

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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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Publisher 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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Related research
Keywords: terror; terrorism; security policy;

Find related papers by JEL classification:
A31 - General Economics and Teaching - - Multisubject Collective Works - - - Multisubject Collected Writings of Individuals
N40 - Economic History - - Government, War, Law, and Regulation - - - General, International, or Comparative

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References listed on IDEAS
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  1. Patrick Lenain & Marcos Bonturi & Vincent Koen, 2002. "The Economic Consequences of Terrorism," OECD Economics Department Working Papers 334, OECD, Economics Department. [Downloadable!]
  2. 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, vol. 20(2), pages 403-421, June. [Downloadable!] (restricted)
  3. Nitsch, Volker & Schumacher, Dieter, 2004. "Terrorism and international trade: an empirical investigation," European Journal of Political Economy, Elsevier, vol. 20(2), pages 423-433, June. [Downloadable!] (restricted)
  4. Mueller, Dennis C., 2004. "Rights and citizenship in a world of global terrorism," European Journal of Political Economy, Elsevier, vol. 20(2), pages 335-348, June. [Downloadable!] (restricted)
  5. Sandler, Todd & Enders, Walter, 2004. "An economic perspective on transnational terrorism," European Journal of Political Economy, Elsevier, vol. 20(2), pages 301-316, June. [Downloadable!] (restricted)
  6. Garfinkel, Michelle R., 2004. "Global threats and the domestic struggle for power," European Journal of Political Economy, Elsevier, vol. 20(2), pages 495-508, June. [Downloadable!] (restricted)
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  7. S. Brock Blomberg & Gregory D. Hess & Akila Weerapana, 2002. "Terrorism From Within: An Economic Model of Terrorism," Claremont Colleges Working Papers 2002-14, Claremont Colleges. [Downloadable!]
  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, vol. 20(2), pages 435-446, June. [Downloadable!] (restricted)
  9. Frey, Bruno S. & Luechinger, Simon, 2004. "Decentralization as a disincentive for terror," European Journal of Political Economy, Elsevier, vol. 20(2), pages 509-515, June. [Downloadable!] (restricted)
  10. Eldor, Rafi & Melnick, Rafi, 2004. "Financial markets and terrorism," European Journal of Political Economy, Elsevier, vol. 20(2), pages 367-386, June. [Downloadable!] (restricted)
  11. Chen, Andrew H. & Siems, Thomas F., 2004. "The effects of terrorism on global capital markets," European Journal of Political Economy, Elsevier, vol. 20(2), pages 349-366, June. [Downloadable!] (restricted)
  12. Brauer, Jurgen & Gomez-Sorzano, Alejandro & Sethuraman, Sankar, 2004. "Decomposing violence: political murder in Colombia, 1946-1999," European Journal of Political Economy, Elsevier, vol. 20(2), pages 447-461, June. [Downloadable!] (restricted)
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