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The economic impact of terrorism: A new model and its application to Pakistan

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  • Estrada, Mario Arturo Ruiz
  • Park, Donghyun
  • Kim, Jung Suk
  • Khan, Alam

Abstract

This paper introduces a new economic model to analyze the effects of a possible terrorist attack, namely the terrorist attack vulnerability evaluation model (TAVE-Model). The model analyzes three different phases of terrorism: (i) origins of a terrorist attack; (ii) terrorist attack itself; and (iii) post-attack effects. In addition, the TAVE-Model identifies economic desgrowth (−δ), intensity of terrorist activities (αi), terrorist attack losses (−π), economic wear (Π), level of terrorist attack tension (ζ), level of terrorist attacks monitoring (η), and total economic leaking (Ωt) under a terrorist attack. Finally, we apply the TAVE-Model to Pakistan, a country where terrorism poses a significant socio-economic risk. More specifically, we use the model to assess the relationship between terrorism and the economic performance of Pakistan.

Suggested Citation

  • Estrada, Mario Arturo Ruiz & Park, Donghyun & Kim, Jung Suk & Khan, Alam, 2015. "The economic impact of terrorism: A new model and its application to Pakistan," Journal of Policy Modeling, Elsevier, vol. 37(6), pages 1065-1080.
    • Handle: RePEc:eee:jpolmo:v:37:y:2015:i:6:p:1065-1080
    DOI: 10.1016/j.jpolmod.2015.08.004
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    References listed on IDEAS

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    Cited by:

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    5. Destek, Mehmet Akif & Manga, Müge & Cengiz, Orhan & Destek, Gamze, 2022. "Investigating the potential of renewable energy in establishing global peace: Fresh evidence from top energy consumer countries," Renewable Energy, Elsevier, vol. 197(C), pages 170-177.
    6. Ruiz Estrada, Mario Arturo & Koutronas, Evangelos, 2016. "Terrorist attack assessment: Paris November 2015 and Brussels March 2016," Journal of Policy Modeling, Elsevier, vol. 38(3), pages 553-571.
    7. Mario Arturo Ruiz Estrada & Donghyun Park & Muhammad Tahir & Alam Khan, 2018. "How does terrorism affect the international trade of Muslims countries?," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(5), pages 2255-2268, September.
    8. Bukhari, Naseem & Masih, Mansur, 2016. "An empirical investigation of causal linkages between domestic terrorism and macroeconomic variables: a case for Pakistan," MPRA Paper 69768, University Library of Munich, Germany.
    9. Abbasi, Kashif & Jiao, Zhilun & Khan, Arman & Shahbaz, Muhammad, 2020. "Asymmetric impact of renewable and non-renewable energy on economic growth in Pakistan: New evidence from a nonlinear analysis," MPRA Paper 101854, University Library of Munich, Germany, revised 13 Jul 2020.
    10. Alam Khan & Zarinah Yusof, 2017. "Trade–Terrorist Evaluation Index (TTEi)," Quality & Quantity: International Journal of Methodology, Springer, vol. 51(1), pages 365-375, January.
    11. Noman Ahmad & Alam Khan & Ihtisham ul Haq & Muhammad Hasnain Khalid & Seemab Ahmad, 2024. "The Impact of Terrorism on International Trade: A Panel Study for SAARC Countries," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(2), pages 671-676.
    12. Bardwell Harrison & Iqbal Mohib, 2021. "The Economic Impact of Terrorism from 2000 to 2018," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 27(2), pages 227-261, May.
    13. Alam Khan & Zarinah Yusof, 2017. "Terrorist economic impact evaluation (TEIE) model: the case of Pakistan," Quality & Quantity: International Journal of Methodology, Springer, vol. 51(3), pages 1381-1394, May.
    14. Chaoqi, Fu & Pengtao, Zhang & Lin, Zhou & Yangjun, Gao & Na, Du, 2021. "Camouflage strategy of a Stackelberg game based on evolution rules," Chaos, Solitons & Fractals, Elsevier, vol. 153(P2).
    15. Mario Arturo Ruiz Estrada & Alam Khan & Donghyun Park, 2018. "The economic cost of the Islamic State on the Syrian and Iraqi economies," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(4), pages 1707-1730, July.
    16. Ruiz Estrada, Mario Arturo & Park, Donghyun & Khan, Alam, 2018. "The impact of terrorism on economic performance: The case of Turkey," Economic Analysis and Policy, Elsevier, vol. 60(C), pages 78-88.
    17. Hira Irshad & Hasniza Mohd Taib, 2017. "A Comparative Analysis of Effects of Terrorism on World Equity Markets," International Journal of Business and Administrative Studies, Professor Dr. Bahaudin G. Mujtaba, vol. 3(6), pages 202-208.
    18. Hunt, Kyle & Agarwal, Puneet & Zhuang, Jun, 2022. "On the adoption of new technology to enhance counterterrorism measures: An attacker–defender game with risk preferences," Reliability Engineering and System Safety, Elsevier, vol. 218(PB).
    19. Hunt, Kyle & Agarwal, Puneet & Zhuang, Jun, 2021. "Technology adoption for airport security: Modeling public disclosure and secrecy in an attacker-defender game," Reliability Engineering and System Safety, Elsevier, vol. 207(C).
    20. Muhammad Taqi & Muhammad Sibt e Ali & Sabiha Parveen & Mehtab Babar & Inam Makki Khan, 2021. "An analysis of Human Development Index and Economic Growth. A Case Study of Pakistan," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 3(3), pages 261-271, December.

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    More about this item

    Keywords

    Terrorism; Economic modeling; Economic desgrowth; Policy modeling; Pakistan;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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