Professors Blomberg and Hess To Lecture On Study of Economics of Terrorism

Brock Blomberg, associate professor of economics and Gregory Hess, the Russell S. Bock Chair of Public Economics and Taxation, will open the Carnegie-Rochester Public Policy Conference on terrorism with their paper, The Macroeconomic Consequences of Terrorism, also co-authored by Athanasios Orphanides of the Federal Reserve Board. The conference takes place Nov. 21-22 in Pittsburgh.

In the study, Blomberg and Hess analyze theoretical and empirical causes of terrorism and its impact on the world economy, encompassing data from more than 170 countries between the late 1960s and the 21st century. “Organized violence lies on a spectrum,” says Hess. “We are trying to benchmark where terrorism lies on that spectrum.”

They argue that, contrary to media and popular perception, terrorism may actually have the least negative impact versus other forms of conflict, such as civil war, and the most damaging form of conflict, outright war. Terrorism, they explain, has both a negative effect on growth, and also a negative redistributive effect by encouraging government spending at the expense of investment.

Although Blomberg and Hess have co-authored and presented numerous other papers on the international stage, this will be their largest presentation to date. “We took a big swing,” said Hess, “obviously this is an important topic. It has more to say, but it invites more criticism, as well.”

For more information on the conference, or to see the paper, visit
http://www.carnegie-rochester.rochester.edu/crNovember03.htm.