Article 2022 · 0 citations

TIME-VARYING ECONOMIC CONSEQUENCES OF TERRORISM IN THE USA: EVIDENCE FROM TVP-SVAR MODEL

Aydin, Halil Ibrahim, Yalcinkaya, Omer, Bulut, Emre

Abstract

This study aims to examine the economic consequences of terrorism (the effects on economic growth and its components) in the U.S. as it suffers from the 9/11 attacks, which is a milestone of literature on the economic consequences of terrorism. We analyze the time-varying effects of terrorism on economic growth and its components in the U.S. for the period of 1970:Q1-2020:Q4 with the nonlinear Time-Varying Parameter Structural Vector Autoregression (TVP-SVAR) model. We construct an index over the values of all measurable dimensions (the number of terrorist incidents, the number of deaths, and the number of injured) of the terrorist acts carried out in the USA. The results show that the time factor is important in revealing the economic consequences of terrorism in the USA. In addition, the effects of terrorism on economic growth and its components have changed significantly in the periods before/after 11/9 and in the short/long term. These results point out the importance of designing security policies that limit the effects of insecurity and uncertainty created by terrorism on the spending decisions of economic actors.

Keywords

Terrorism The Components of Economic Growth Terrorism Index USA TVP-SVAR MACROECONOMIC CONSEQUENCES UNIT-ROOT GROWTH COST

WoS Categories

Economics Mathematics, Interdisciplinary Applications

Sustainable Development Goals

16 Peace and Justice Strong Institutions

Citation

Journal: ECONOMIC COMPUTATION AND ECONOMIC CYBERNETICS STUDIES AND RESEARCH
Year: 2022
Volume: 56
Issue: 2
Pages: 133-148
ISSN: 0424-267X
eISSN: 1842-3264
DOI: 10.24818/18423264/56.2.22.09
WoS UID: WOS:000819597400009

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