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Using the Beveridge & Nelson decomposition of economic time series for pointing out the occurrence of terrorist attacks

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  • Gómez-Sorzano, Gustavo

Abstract

This paper continues my research program on violence and terrorism started 15 years ago. It presents in the first part through empirical exercises, the suitability of The Beveridge and Nelson decomposition of economic time series for pointing out the occurrence of terrorist attacks. It presents the simulation results of the hypothetical case of U.S., and Colombia experiencing, additional, and first three terrorist attacks similar to 9/11, 2001: for the U.S. additional attacks are simulated occurring in 1996, and 1998 with 24,950, and 61,516 casualties respectively; while for Colombia three attacks are artificially constructed independently in 1993 with 3,000 casualties, and 2001 with alternatives scenarios of 3,000 and 4,299 casualties. In the second part, while the model for terrorist attacks in U.S. soil is developed, and knowing that the geo-political context of the war in Iraq is different, Its objective, is to use the experience from Colombia to help policy, and decision makers understand the probable outcomes and implications of decisions taken today in regards to the war in Iraq. It uses the terrorist murder and attacks indicator from 1946 to 2001 for Colombia that assumes a 9/11 in Colombia killing 3,000 civilians, and that as its consequence the Colombian army started a strong confrontation against the enemy as the U.S did at that time. This indicator is used as dependent variable to re-estimate the model for cyclical terrorist murder for Colombia (Gómez-Sorzano 2006B, http://mpra.ub.uni-muenchen.de/539/01/MPRA_paper_539.pdf) using it, for sensitivity analysis scenarios including troop deployment decisions identical to those already taken by the U.S. during the war in Iraq. The last section concludes showing dynamically how at this point, moderate troop withdrawals and disarmament, will reduce both the intensity of the conflict and the estimated terrorist murder and attacks indicator for the U.S.

Suggested Citation

  • Gómez-Sorzano, Gustavo, 2006. "Using the Beveridge & Nelson decomposition of economic time series for pointing out the occurrence of terrorist attacks," MPRA Paper 3388, University Library of Munich, Germany, revised 22 Mar 2007.
    • Handle: RePEc:pra:mprapa:3388
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    References listed on IDEAS

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    1. John Y. Campbell & Pierre Perron, 1991. "Pitfalls and Opportunities: What Macroeconomists Should Know about Unit Roots," NBER Chapters, in: NBER Macroeconomics Annual 1991, Volume 6, pages 141-220, National Bureau of Economic Research, Inc.
    2. Beveridge, Stephen & Nelson, Charles R., 1981. "A new approach to decomposition of economic time series into permanent and transitory components with particular attention to measurement of the `business cycle'," Journal of Monetary Economics, Elsevier, vol. 7(2), pages 151-174.
    3. Newbold, Paul, 1990. "Precise and efficient computation of the Beveridge-Nelson decomposition of economic time series," Journal of Monetary Economics, Elsevier, vol. 26(3), pages 453-457, December.
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    More about this item

    Keywords

    United States; Colombia; cyclical terrorist murder; cyclical terrorist murder and attacks indicator; terrorist murder and attacks index; terrorist murder and attacks signal; model of cyclical terrorist murder for Colombia; model for terrorist attacks in U.S. soil;
    All these keywords.

    JEL classification:

    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
    • N42 - Economic History - - Government, War, Law, International Relations, and Regulation - - - U.S.; Canada: 1913-
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • N46 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Latin America; Caribbean
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • P10 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - General
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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