Abadie, Alberto & Javier Gardeazabal. Term Paper

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9). Furthermore, as the Basque Country is a region, not an enclosed nation, the authors experienced some difficulty dividing up stocks into Basque and non-Basque stocks in relation to influences of 'Good News' or 'Bad News' in another of their measurements of economic prosperity, that of stock performance of companies based in the region.

These variables of 'Good News' and 'Bad News' are of course inevitably subjective characterizations; no matter how empirically these factors are quantified, again highlighting the difficulty of the process of quantifying something as subjective as 'effect.'

4. What did you learn from the paper?

Linking terrorism to economic instability would seem like the classic chicken and egg question. It might seem difficult to establish causality because economically instable or impoverished countries lack the ability to afford their citizens opportunities, and thus become hot bets of terrorism. Thus, the economic difficulties might precede the outbreaks of terrorism. This article provides some suggestions how to establish causality as well as a correlation between terrorism and economic conditions.

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5. What should be further studied?

Terrorism is rather broadly defined in the article. Do different kinds of terrorism affect a nation differently? What about the levels of support within the non-terrorist population for the terrorist group? Why do some nations affected by terrorism, like Lebanon, fall rapidly from prosperity into chaos, while other nations experience economic difficulties of a different kind like Ireland, while still others seem less affected like the United Kingdom?

Defining different types of terrorist activity and seeing if certain types have a greater economic effect might be one possible study to begin to answer these questions. Also, given the terrorism endured in the Basque Country was of a particular variety, it would be important to see if the type of terrorism the Basques endured, the ideology of the group, and the level of political support for the group….....

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