The Impact of Terrorism on Economic Performance: The Case of Turkey

Economic Analysis and Policy Vol.60 pp. 78-88

Posted: 1 Nov 2018 Last revised: 1 Dec 2018

See all articles by Mario Arturo Ruiz Estrada

Mario Arturo Ruiz Estrada

Universidad San Carlos de Guatemala (USAC)

Donghyun Park

Asian Development Bank - Economic Research

Alam Khan

University of Malaya (UM) - Faculty of Economics & Administration (FEA)

Date Written: October 10, 2018

Abstract

We apply the terrorist attack vulnerability evaluation model (TAVE-Model) to evaluate the effect of terrorism on the economic performance of Turkey. We examine both the short run and long-run economic impact of terrorist attacks in Turkey. The TAVE-Model deploys a number of indicators to evaluate the economic impact. The indicators are 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. The basic underlying idea of TAVEModel is that the economic impact of a terrorist attack depends on a country’s vulnerability to attacks from domestic and international terrorist groups. The application of a model to Turkey is highly topical in light of the spate of terrorist attacks the country suffered in recent years. The results of TAVE-Model confirm that economic leaking, economic desgrowth, and economic wear has increased between 1990 and 2016. The issue of terrorism in Turkey is multidimensional, and tackling it requires an effective social assistance program as well as a stronger and impartial justice system. These reforms will render poorer Turks less vulnerable and increase the opportunity cost of terrorism.

Keywords: Terrorism, Economic Modeling, Economic Desgrowth, Policy Modeling, Turkey

JEL Classification: R11, R12

Suggested Citation

Ruiz Estrada, Mario Arturo and Park, Donghyun and Khan, Alam, The Impact of Terrorism on Economic Performance: The Case of Turkey (October 10, 2018). Economic Analysis and Policy Vol.60 pp. 78-88. Available at SSRN: https://ssrn.com/abstract=3263882

Mario Arturo Ruiz Estrada (Contact Author)

Universidad San Carlos de Guatemala (USAC) ( email )

Ciencias Economicas, Ciudad Universitaria Zona 12
Guatemala City, Guatemala City
Guatemala

Donghyun Park

Asian Development Bank - Economic Research ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Alam Khan

University of Malaya (UM) - Faculty of Economics & Administration (FEA) ( email )

University of Malaya
Kuala Lumpur, Wilayah Persekutuan 50603
Malaysia

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