Countries around the world have felt the impacts of terrorism, and its effects reverberate throughout both national and global economies. Investment, consumption and tourism fall off in the affected areas, according to several studies. Pessimistic expectations also play a large part in all these negative economic outcomes: When investments appear risky and travel seems unsafe, these perceptions eventually become a self-fulfilling prophecy. Researchers Dorine Boumans and Johanna Garnitz and Professor Günther Schulze conducted a survey that explores the question of how such perceptions evolve and that provides noteworthy insights into the economic implications of terrorism. getAbstract recommends their report to economists and government officials.
About the Authors
Dorine Boumans and Johanna Garnitz are researchers at the Ifo Institute. Gūnther Schulze is an economics professor at the University of Freiburg.