The Economics of Terrorism: A (Simple) Taxonomy of the Literature

We draw on existing surveys on the economics of terrorism, classifying the contributions to the field by theme, main approach and methodology. Research articles are divided into the themes: Definition and measurement of terrorist activities; Nature of terrorists; Utility cost of terrorism; Impact of terrorism on aggregate output; Terrorism and specific sectors of activity; Terrorism and economic policy; and Counter-terrorist policies. For the set of papers examined, as well as for each theme, we divide the papers by main approach - macroeconomic/microeconomic - and methodology - theoretical/empirical. We find wide variation in approach/methodology across research themes, suggesting extensive research opportunities.