This Paper analyses the effect of terror on the economy. Terror endangers life such that the value of the future … relative to the present is reduced. Hence, due to a rise in terror activity, investment goes down, and in the long run income … and consumption go down as well. Governments can offset terror by putting tax revenues into the production of security …

confronts supreme-value suicide terror. A moral dilemma then arises, since preemption may impose collective punishment, while …, in the absence of preemption, the population of intended victims is exposed to acts of terror. We consider how a … population of intended terror victims confronts the moral dilemma, and compare the threatened population’s response with the …