DP6174 International Trade, Security and Transnational Terrorism: Theory and Empirics

Author(s):	Daniel Mirza, Thierry Verdier
Publication Date:	March 2007
Keyword(s):	globalization, security, terrorism
JEL(s):	F12, F13
Programme Areas:	International Trade and Regional Economics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=6174

In this paper, we offer a general analytical framework to illustrate the complex two-way interactions between trade and transnational terrorism. We then survey the recent economic literature in light of this framework by pointing to the importance in empirical studies a) to control appropriately for these interactions, b) to distinguish between 'source' countries and 'target' countries of terrorism and c) to take into account the intertemporal persistence of terrorism between specific pairs of countries.