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Terrorism, Trade and Public Policy

  • James E. Anderson

    ()

    (Boston College)

Are bigger markets safer? How should government policy respond to terrorist threats? Trade draws potential terrorists and economic predators into productive activity, but trade also draws terrorist attacks. Larger trade reduces the risk of terrorist attack when the wage elasticity is high, associated with low ratios of predators to prey and high wages; but it may increase the risk of terrorist attack when the wage elasticity is low, associated with high ratios of predators to prey. Anti-terrorist trade policy should always promote trade in simultaneous play. Government first mover advantage and inelastic wage may imply trade restriction. Tolerance of smuggling may improve security. Better enforcement should ordinarily be provided for bigger, inherently safer and higher wage markets.

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Paper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 701.

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Date of creation: 01 Dec 2008
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Handle: RePEc:boc:bocoec:701
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  1. Michelle R. Garfinkel & Stergios Skaperdas & Constantinos Syropoulos, 2005. "Globalization and Domestic Conflict," International Trade 0507005, EconWPA.
  2. James E. Anderson, 2008. "Commercial Policy in a Predatory World," Boston College Working Papers in Economics 703, Boston College Department of Economics.
  3. Mirza, Daniel & Verdier, Thierry, 2007. "International Trade, Security and Transnational Terrorism: Theory and Empirics," CEPR Discussion Papers 6174, C.E.P.R. Discussion Papers.
  4. repec:ags:afjare:141665 is not listed on IDEAS
  5. James E. Anderson, 2003. "Traders, Cops and Robbers," NBER Working Papers 9572, National Bureau of Economic Research, Inc.
  6. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Boston College Working Papers in Economics 593, Boston College Department of Economics.
  7. Mirza, Daniel & Verdier, Thierry, 2007. "Are Lives a Substitute for Livelihoods? Terrorism, Security and US Bilateral Imports," CEPR Discussion Papers 6173, C.E.P.R. Discussion Papers.
  8. Alan B. Krueger & Jitka Maleckova, 2003. "Education, Poverty and Terrorism: Is There a Causal Connection?," Journal of Economic Perspectives, American Economic Association, vol. 17(4), pages 119-144, Fall.
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