The Economic Impact of Terrorism: A New Model and Its Application to Pakistan.

Posted: 7 Sep 2015 Last revised: 20 Nov 2015

See all articles by Mario Arturo Ruiz Estrada

Mario Arturo Ruiz Estrada

Econographication Virtual Laboratory (EVL); Universidad de San Carlos de Guatemala - Facultad de Ciencias Economicas

Donghyun Park

Nanyang Technological University (NTU); Asian Development Bank

Jungsuk Kim

Sogang University - Institute of International and Area Studies

Alam Khan

KUST

Date Written: September 6, 2015

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.

Note: © 2015 Society for Policy Modeling. Published by Elsevier Inc. All rights reserved.

Keywords: Terrorism; Economic modeling; Economic desgrowth; Policy modeling; Pakistan

JEL Classification: R11; R12

Suggested Citation

Ruiz Estrada, Mario Arturo and Park, Donghyun and Kim, Jungsuk and Khan, Alam, The Economic Impact of Terrorism: A New Model and Its Application to Pakistan. (September 6, 2015). Journal of Policy Modeling (JPM), 37(6): 1065-2080, Available at SSRN: https://ssrn.com/abstract=2656893

Mario Arturo Ruiz Estrada (Contact Author)

Econographication Virtual Laboratory (EVL) ( email )

Kuala Lumpur
Malaysia
+60126850293 (Phone)
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HOME PAGE: http://www.econographication.com

Universidad de San Carlos de Guatemala - Facultad de Ciencias Economicas ( email )

Ciudad Universitaria Zona 12
Guatemala City, Guatemala city 01012
Guatemala
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HOME PAGE: http://www.usac.edu.gt

Donghyun Park

Nanyang Technological University (NTU) ( email )

S3 B2-A28 Nanyang Avenue
Singapore, 639798
Singapore

Asian Development Bank

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Jungsuk Kim

Sogang University - Institute of International and Area Studies ( email )

35 Baekbeom-ro
Mapo-gu
Seoul, Seoul 121-742
Korea, Republic of (South Korea)

Alam Khan

KUST ( email )

Department of Economics Kohat University of Scienc
Kohat, Khyber Pakhtunkhwa 26000
Pakistan

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