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A Note on the Effect of Terrorism on Economic Sentiment

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  • Konstantinos Drakos
  • Christos Kallandranis

Abstract

This study documents that unforeseen events like terrorist attacks can be linked to the formation of Economic Sentiment after controlling for sentiment's economic drivers. By utilizing dynamic panel techniques, the Economic Sentiment Indicator, as well as one of its constituents Consumer Sentiment, for a pan-European panel of 27 countries appear to be negatively influenced by terrorism activity. Moreover, these negative effects are significant only in the post-9/11 era.

Suggested Citation

  • Konstantinos Drakos & Christos Kallandranis, 2015. "A Note on the Effect of Terrorism on Economic Sentiment," Defence and Peace Economics, Taylor & Francis Journals, vol. 26(6), pages 600-608, December.
    • Handle: RePEc:taf:defpea:v:26:y:2015:i:6:p:600-608
    DOI: 10.1080/10242694.2015.1016295
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    References listed on IDEAS

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    1. Djerf, Kari & Takala, Kari, 1997. "Macroeconomy and consumer sentiment : performance of the Finnish consumer barometer after ten years," Research Discussion Papers 20/1997, Bank of Finland.
    2. repec:zbw:bofrdp:1997_020 is not listed on IDEAS
    3. Berg Lennart & Bergström Reinhold, 1996. "Consumer Confidence and Consumption in Sweden," Working Paper Series 1996:7, Uppsala University, Department of Economics.
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    Cited by:

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    3. Bouoiyour, Jamal & Selmi, Refk & Hammoudeh, Shawkat & Wohar, Mark E., 2019. "What are the categories of geopolitical risks that could drive oil prices higher? Acts or threats?," Energy Economics, Elsevier, vol. 84(C).
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