Working Paper: CEPR ID: DP6174
Authors: Daniel Mirza; Thierry Verdier
Abstract: In this paper, we offer a general analytical framework to illustrate the complex two-way interactions between trade and transnational terrorism. We then survey the recent economic literature in light of this framework by pointing to the importance in empirical studies a) to control appropriately for these interactions, b) to distinguish between 'source' countries and 'target' countries of terrorism and c) to take into account the intertemporal persistence of terrorism between specific pairs of countries.
Keywords: Globalization; Security; Terrorism
JEL Codes: F12; F13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Terrorism (H56) | Increased transaction costs (D23) |
| Increased transaction costs (D23) | Negative impact on trade flows (F69) |
| Terrorism (H56) | Negative impact on trade flows (F69) |
| Counterterrorist policies (H56) | Increased transaction costs (D23) |
| Increased transaction costs (D23) | Negative impact on trade (F69) |
| GDP levels (P24) | Propensity for terrorism (H56) |
| Trade openness (F43) | Vulnerability to terrorism (F52) |
| Trade openness (F43) | Diminished incentives for terrorism in source countries (F51) |