THE ENDOGENOUS AND NON-LINEAR RELATIONSHIP BETWEEN TERRORISM AND ECONOMIC PERFORMANCE: TURKISH EVIDENCE

Araz-Takay B., Arin K. P., OMAY T.

DEFENCE AND PEACE ECONOMICS, cilt.20, sa.1, ss.1-10, 2009 (SSCI) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 20 Sayı: 1
  • Basım Tarihi: 2009
  • Doi Numarası: 10.1080/10242690701775509
  • Dergi Adı: DEFENCE AND PEACE ECONOMICS
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus
  • Sayfa Sayıları: ss.1-10
  • Hacettepe Üniversitesi Adresli: Evet

Özet

This paper investigates the macroeconomic effects of terror by using a novel data set from Turkey for the period of 1987:1 to 2004:4. This research contributes to the literature by controlling for the possible non-linear and endogenous relationship between political conflict and economic activity. Empirical evidence from both linear and non-linear models confirms that terrorism has a large significant negative impact on economic activity. Finally, the results from the non-linear model show that the impact of terrorism on the aggregate economy is more severe during expansionary periods, and that the impact of economic activity on terrorism is significant only in recessionary periods.