A question from Yahoo! Answers:
What is the impacts of the terrorism on the world economy?
For modern world ,the terrorism become a new risk to the business world.So how come it can affect to the world economy ?what areas it can affect and how we can do to keep a healthy economy enviroment ?
Here’s a reference to one case study:
Alberto Abadie, Javier Gardeazabal, “The Economic Costs of Conflict: A Case Study of the Basque Country,” The American Economic Review, Vol. 93, No. 1. (Mar., 2003), pp. 113-132.
This article investigates the economic effects of conflict, using the terrorist conflict in the Basque Country as a case study. We find that, after the outbreak of terrorism in the late 1960’s, per capita GDP in the Basque Country declined about 10 percentage points relative to a synthetic control region without terrorism. In addition, we use the 1998-1999 truce as a natural experiment. We find that stocks of firms with a significant part of their business in the Basque Country showed a positive relative performance when truce became credible, and a negative relative performance at the end of the cease-fire.