9/11 Literature Review

REVIEW NUMBER 1

9/11 terrorist attacks .

Objective : The objective of the study is to ascertain the economic and non economic impacts the 9/11 terrorist attacks had on the US economy and furthermore puts some light on the resilience of the US economy.

Methodology : To author studied the impact of the 9/11 attacks on the US stock market , economic growth , consumer confidence in spending , Foreign Direct Investment and fiscal policy and budgetary resources.

Conclusion :

1. Inspite of the terrorist attacks the US economy was holding firm ground. This was exemplified by the Dow Jones going from 8920 points (just going down by 684 points) on the opening day following the attacks to nearly 13000 on April 26, 2006 which was remarkable.

2. The author

Methodology : The writer has applied theoretical and statistical tools so that it can be clearly understood why goverments and terrorists take certain actions which are against their interests.

Conclusion :

1. One of the main mottos of terrorists is to force the state to concede to their demands (with the help of terrorist activities). As a result they try to intimidate or terrify a large/wide population so that this population puts pressure on political decision makers to meet their demands.

2. The writer states that political decision makers should compare the conceding costs against the anticipated costs relating to future attacks. He feels that if the cost on anticipation exceeds the conceding costs then the goverement must take a rational decision to give in to the wants of the terrorists. ( Eg. Hamas suicide campaign against Israel led to the partial Israeli withdrawal from the west

Objective : The paper evaluates the economic effects of short term nature on New York City caused by the 9/11 terrorist attacks. It also takes into account the effects on various markets such as office space, home construction and home sales, along with discussing how the attacks affected the citizens of New York City.

Methodology : The writer used an autoregressive forecasting model and tried to establish the relationship between the growth in employment of New York city and the rest of the nation. The number of lags used in the regression analysis (persistence of movements in employment) was between 3 to 8. He also studied actual and simulated data post September 11. Thus he formulated equations so as to assess the impact.

Conclusion :

1. The salary and wage earnings shortfall increased from 3.6 billion to 6.4 billion. This showed that the attack caused job losses and also reduction in the number of working hours.

2. Sharp decrease in consumer confidence.

3. One of the surprising outcomes of the attack was that even though it was believed that vacancy rates would fall and the rents would increase, the opposite happened. There was a further increase in the vacancy rates and the rents of the office market