Economics of Terrorism
Terrorism has become one of the world’s biggest threats today, due to the terror attacks that have taken place against the U. ... Although Terrorism has existed for many years it was never carried out at such a level where it would affect large economies like the U. ... was the first nation to make the important decision to fight terrorism, a decision that would cost the nation billions of dollars. ... First the amount of trade between countries has been affected negatively, because the threat of terrorism reduces trade flows. ... Insurance on trade has increased due to the increase in terrorism threat. This means that it will cost more to trade between countries, especially those that are of high threat to terrorism. Recent estimate indicate that if the United States has to carry 10 percent more in inventories and pay 20 percent more commercial insurance premiums as a result of the increased terrorism threat, it would cost $7. ... A very important affect that terrorism has on an economy is that it reduces investments and economic growth. ... American investments abroad have also been hurt by terrorism, especially in Muslim countries, which represent more than one quarter of all countries. ... An industry that is also affected to a great extent by terrorism is the industry of tourism and all factors that relate to it. ... 9 percent (The economies of terrorism, USA Today 2002). ... In the last five months of 2001, the travel industry lost 237,000 jobs (Economics: At Home). ... In addition in August 2002, US Airways filed for chapter 11 bankruptcy protection, citing decreased passenger loads and increased security costs since September 11 (Terrorism Answers).