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Terrorized economies

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Abstract

In this paper we estimate the macroeconomic consequences of terrorism using panel data for 147 countries for the period 1968–2002. The results reveal that the potential gains to a country from reducing terrorism are quite large, although the specific estimates depend on a country's population, base level of output, and investment. We present estimates of the impact of terrorism on GDP, GDP growth, investment, consumer spending, and tourism. These estimates of the marginal impact of terrorism provide a threshold against which a country's expenditures on anti-terrorism can be weighed.

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Authors and Affiliations

  1. Department of Economics, The National Defense University Industrial College of the Armed Forces, Washington, DC, 20319, USA

    Nicole V. Crain

  2. Lafayette College, Easton, PA, 18042, USA

    Nicole V. Crain

  3. Department of Economics and Business, Lafayette College, Easton, PA, 18042, USA

    W. Mark Crain

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  1. Nicole V. Crain
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Correspondence to Nicole V. Crain.

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Crain, N.V., Crain, W.M. Terrorized economies. Public Choice 128, 317–349 (2006). https://doi.org/10.1007/s11127-006-9056-6

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