The Economic Consequences of Terror: A Brief Survey

Tilman Br�ck () and Bengt-Arne Wickstr�m ()
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Tilman Br�ck: German Institute for Economic Research (DIW Berlin)
Bengt-Arne Wickstr�m: Humboldt University of Berlin
Authors registered in the RePEc Author Service: Tilman Brück

No 3, HiCN Working Papers from Households in Conflict Network

Abstract: This brief survey reviews the economic consequences of terrorism. It is argued that the indirect effects of terrorism are likely to outweigh the direct effects. The former include changes in risk, transaction costs, demand, public finances and growth. We also address the nature of anti-terrorist policy and of policies reducing the negative impact of terrorism. The former can change the incentives for terrorists to break with social conventions or maximize the costs of conducting terrorism. The latter is particularly important as badly designed policies could enhance the negative economic effects of terrorist actions.

Keywords: terror; terrorism; security policy (search for similar items in EconPapers)
JEL-codes: A31 N40 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2004-04
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Citations: View citations in EconPapers (11)

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