An Economic Look at Terrorism

This thesis aims to assess the macroeconomic consequences of terrorist attacks. Dierent terrorism datasets have been constructed to estimate these eects. Based on daily time series analysis, evidence is provided that most major terrorist attacks only have a temporary negative eect on stock returns and a temporary strong positive eect on economic uncertainty. Such terrorist attacks are inconsequential for oil prices. Based on monthly time series analysis, terrorist attacks have a negative short-run eect on the Dutch consumer condence indicator of three points on average, depending on the severity of the attack. Evidence is provided from the literature that the impact of these eects on GDP growth is limited.