This paper has four purposes. First and most important, the paper takes stock of the literature on the economic consequences of terrorism and evaluates the methodology used to date. The literature dates back to the early 1990s, with most of the contributions coming after 9/11. Second, macroeconomic influences of terrorism are distinguished from microeconomic sector- or industry-specific effects. Third, terrorism impacts in developed countries are contrasted with those in developing countries. Fourth, we indicate how researchers can better account for economic consequences in developing countries.
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