ABSTRACT
Studies regarding the economic repercussion of terrorism have gained—especially after the attacks of 9/11—wide attention from scholars and policymakers, both from the input (terrorist financing) and the output (economic consequences of terrorism) side. The chapter provides an overview of the current state of the art regarding the economic impact of terrorism differentiating two scenarios. The scenarios are single or isolated terrorist events of a certain magnitude and countries or regions which suffer terrorist attacks over an extended period of time. The chapter reviews the question about terrorist incomes and its sources, as practice has proven that cutting off a terrorist group's financial income represents a crucial aspect of any effective counterterrorist policy. Measuring the money handled by terrorist groups is a complicated matter, as the police forces seldom manage to capture their bookkeeping, as occurred with the Basque terrorist group ETA in 1986.
