9/11 Terrorism: Global Economic Costs

The 9/11 attacks were part of Al Qaeda?s strategy to disrupt Western economies and impose both direct and secondary costs on the United States and other nations. The immediate costs were the physical damage, loss of lives and earnings, slower world economic growth, and capital losses on stock markets. Indirect costs include higher insurance and shipping fees, diversion of time and resources away from enhancing productivity to protecting and insuring property, public loss of confidence, and reduced demand for travel and tourism. In a broader sense, the 9/11 attacks led to the invasions and occupations of Afghanistan and Iraq (and the Global War on Terrorism) and perhaps emboldened terrorists to attack in Bali, Spain, Morocco, and Saudi Arabia. A policy question for Congress is how to evaluate the costs and benefits of further spending to counter terrorism and its economic impact.