Economic impact of security threats

Economic scholars have analyzed the economic impacts of criminal acts and the economic impacts of terrorist acts have on various aspects of the economy. According to Krugman (2004), the economic impacts of terrorism are similar to the economic effects of crime. They can be divided into three groups:

1. The direct economic impacts performed by criminal and terrorist acts on the urban object (buildings and infrastructure destroyed, productive lives ended).
2. The indirect economic impacts (on the urban environment) such as effects on tourism, investments, consumption, trade, etc.).
3. Budget effects of preventive security measures against crime and terrorism.

For example, money spent on national defense, airport security, police et cetera, in an attempt to prevent or forestall future criminal and terrorist events.The economic impacts of security threats are related to:

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