Terrorism and the macroeconomy: Evidence from Pakistan

Sultan Mehmood

Defence and Peace Economics, 2014, vol. 25, issue 5, 509-534

Abstract: Pakistan with highest number of terrorism related deaths of any country over the past decade, the number exceeding the total terrorism related deaths for both the European and North American continents, provides an ideal laboratory to study impact of terrorism on the macroeconomy. Quasi-Structural VAR, Vector Error Correction Model, Impulse Response Functions and Granger-Causality tests on a sample that covers over 4500 terrorist incidents and consequent 10, 200 deaths [from 1973 to 2010] are employed to study the relationship between terrorism and the macroeconomy. One of the major advantages of the current methodology is that it not only enables one to circumvent the heterogeneity biases inherent in cross-country studies but it also allows distinguishing between short and long-run effects. It is documented that cumulatively terrorism has cost Pakistan around 33.02% of its real national income i.e. terrorism costs Pakistan around 1% of real GDP per capita growth every year.

Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
http://hdl.handle.net/10.1080/10242694.2013.793529 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Terrorism and the macroeconomy: Evidence from Pakistan (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:defpea:v:25:y:2014:i:5:p:509-534

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/GDPE20

DOI: 10.1080/10242694.2013.793529

Access Statistics for this article

Defence and Peace Economics is currently edited by Professor Keith Hartley

More articles in Defence and Peace Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().