Economic impact of security threats

Economic impact of security threats

Economic scholars have analyzed the economic effects of both criminal and terrorist acts. According to Krugman (2004), the economic impact of terrorism is similar to the economic impact of crime, and can be divided into three groups:

1. The direct economic impact performed by criminal and terrorist acts on the urban object (buildings and infrastructure destroyed, productive lives ended).
2. The indirect economic impact (on the urban environment)such as effects on tourism, investments, consumption, trade, etc.).
3. Budget effects of preventive security measures against crime and terrorism such as money spent on national defense, airport security, and the police, in an attempt to prevent or forestall future criminal and terrorist events. The economic impact of security threats are related to:

• The economic impact of urban planning
• The economic effects of security measures
• The economics of terrorist and criminal behaviour

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