A study of economic security

Paper focus on the relationship between economic security and economics of terrorism. The authors divide the economic costs of terrorism into short term and long term costs. The authors consider as short-term costs following examples: losses in the form of immediate shock, loss of life and property values, which are followed by negative effects on the insurance, short-term investments, stock markets, tourism and its associated employment. Simultaneously, they believe that long-term costs of terrorism lie in permanent slowdown in economic growth for both the national and international economy. The authors warn of the forced expenditure on security, supply chain security and supply system. They come to the conclusion that on the grounds of increasing risk of the terrorism, states are forced to transfer their resources from production an additional wealth to realization of security measures to protect existing resources, thus reducing the long-term productivity and output. This leads to a reduction in the national and world growth of the potential output. A deeper understanding of the relationship between economic security and economics of terrorism is crucial to find an appropriate policy response on the terrorist threats.