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Terrorism and Market Jitters

Author

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  • Christos Kollias
  • Stephanos Papadamou

Abstract

Terrorist actions can have a multitude of economic consequences that may adversely affect a number of economic indices, sectors and activities including growth and investment. From the markets' perspective, terrorist attacks are unforeseen events that, depending among other things on their magnitude, the number of casualties, the extent of the damages, the targets hit; shake and rattle them. Such incidents can also have a high contagion potential with the shock waves travelling quickly from onemarket to another. Nevertheless, the negative impact on markets from terrorist attacks is, in comparative terms, mild and short-lived.

Suggested Citation

  • Christos Kollias & Stephanos Papadamou, 2012. "Terrorism and Market Jitters," EUSECON Policy Briefing 21, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwepb:diwepb21
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.404028.de/diw_eusecon_pb0021.pdf
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    References listed on IDEAS

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    1. Bruck, Tilman & Wickstrom, Bengt-Arne, 2004. "The economic consequences of terror: guest editors' introduction," European Journal of Political Economy, Elsevier, vol. 20(2), pages 293-300, June.
    2. Kollias, Christos & Manou, Efthalia & Papadamou, Stephanos & Stagiannis, Apostolos, 2011. "Stock markets and terrorist attacks: Comparative evidence from a large and a small capitalization market," European Journal of Political Economy, Elsevier, vol. 27(S1), pages 64-77.
    3. Bruce A. Champ, 2003. "Open and operating: providing liquidity to avoid a crisis," Economic Commentary, Federal Reserve Bank of Cleveland, issue Feb.
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