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It has added a lot of volatility to the market. For instance, every time there is a "crisis" in the Middle East (Iran threatens Israel, etc), the price of oil goes up. This is because a war in that region would result in a disruption in the supply of oil (see the Iraq War), so any hint of a problem causes a jump in prices. Also, the attacks of 9/11 put the American economy into a recession. Whenever there is a lot of uncertainty (and the threat of terrorism does that easily), it creates a lot of risk aversion, which has a lot of negative effects on the economy such as less investment, less spending, and less risk-raking.
Wiki User
∙ 15y ago
Wiki User
∙ 9y agoTerrorism affects the economy in many ways. One of the primary ones is that people are scared to leave their homes for fear of being in an attack themselves, so they spend less money with local businesses, which hurts the local economy and may even cause businesses to close.
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