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The Economic Consequences of Terrorism

Listed author(s):
  • Patrick Lenain
  • Marcos Bonturi
  • Vincent Koen

The unprecedented 11 September 2001 terrorist attacks in the United States caused massive casualties and damage, and ushered in an era of greater uncertainty. While a prompt and vigorous policy response helped limit the immediate economic impact of the aggression, the heightened terrorist threat has some long-lasting, if diffuse, macroeconomic repercussions. Three channels of influence are explored in this paper: shrinking insurance coverage stemming from the perception of greater risk, higher trade costs possibly affecting international trade, and stepped-up security spending partially rolling back the “peace dividend” of the 1990s. It is argued that, in the absence of new large-scale terrorist attacks, and provided terrorism risk is dealt with efficiently, the net long-run macroeconomic impact is probably tangible but limited ... Les conséquences économiques du terrorisme Les attentats sans précédent du 11 septembre 2001 aux États-Unis ont causé des pertes humaines et des dégâts matériels énormes, et ont inauguré une ère de plus grande incertitude. Si une réponse rapide et vigoureuse des responsables a aidé à limiter l’impact économique immédiat de l’agression, le renforcement de la menace terroriste a des répercussions macroéconomiques durables, quoique diffuses. Trois canaux d’influence sont examinés dans la présente étude : une couverture d'assurance réduite résultant de la perception de risque plus important, des coûts de transaction plus élevés pouvant affecter le commerce international, et une augmentation des dépenses de sécurité renversant partiellement le « dividende de la paix » des années 90. Il en ressort qu’en l’absence de nouvelles attaques de grande ampleur, et à condition que le risque terroriste soit géré efficacement, l’impact macroéconomique net à long terme est probablement tangible mais limité ...

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Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 334.

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Date of creation: 17 Jul 2002
Handle: RePEc:oec:ecoaaa:334-en
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