Edited by Harry W Richardson, Peter Gordon and James E. Moore II
Chapter 8: The National Economic Impacts of a Food Terrorism Event: Initial Estimates of Indirect Costs
* Thomas F. Stinson Terrorist attacks create real losses for society. Quantifying those losses is a sobering, but important task since it provides vital information for policymakers to use as they choose how to allocate scarce public and private sector resources. Calculating the direct economic losses – the value of the lives and income lost and the business activity lost by ﬁrms in the industries and communities directly aﬀected by any attack – is a relatively straightforward and useful ﬁrst measure of the cost of the terrorists’ actions. Those losses will be catastrophic for many aﬀected individuals and ﬁrms. But, while substantial at the micro level, they are likely to be small when viewed against the entirety of the US economy. Other losses will not be readily quantiﬁable. They include the psychological and emotional damage resulting from the attack. Those losses will be more widespread and are likely to extend well beyond the area immediately aﬀected. In many instances those damages will be national in scope, for in the broadest sense we will all be victims of any future terrorist attack since each of us will lose some of the sense of security we once had. The psychological and emotional impacts that follow the attack are likely to inﬂuence consumer spending and business investment decisions and the performance of the entire US economy over an extended period. Terrorism’s follow-on impacts on the broader macro-economy are likely to be much larger than the losses suﬀered by those directly...
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