Impact of terrorism on global economy
The loss of human life and the injuries sustained as a result of terrorism cause significant economic disruption. The adverse economic consequences of terrorism affect individuals and societies alike. The immediate economic costs of terrorism can be measured in terms of the value of lives lost, the disability that results from the injuries, and the destruction of private and public property.
Beyond the immediate impact, terrorism produces disruptions to the broader economy that may only appear days, weeks or months after the terrorist incident. Depending on the scale and frequency of the terrorist events within a country, the economic impact of terrorism on growth, investment, consumption and tourism is a serious threat to the economic development and growth of a country. The broader implications of terrorism also depend on the ability of the economy to reallocate resources from the affected sectors smoothly.
Terrorism alters economic behaviour, primarily by changing investment and consumption patterns as well as diverting public and private resources away from productive activities and towards protective measures. Terrorism destroys capital and reduces the economic capacity of the country affected.
This paper uses the Global Terrorism Index (GTI) framework developed by the Institute for Economics and Peace (IEP) to estimate the global economic impact of terrorism (Institute for Economics and Peace IEP 2019). The data for this study comes from the Global Terrorism Database (GTD) produced by the University of Maryland. The paper only focuses on incidents of terrorism since the turn of the century; thus, the events from 2000 to 2018 are examined. The study uses a cost accounting methodology that costs the deaths and injuries from terrorism incidents using an adjusted unit cost provided by McCollister, French, and Fang (2010),(D,G,2020)
Fact that the outbreak of terrorism gang leads to political instability which cause low production, loss of man power and decline of economic market which lead to ecomic crisis to the world wide because each country depend on others in terms of labour, resources and market
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