The economic theory of defense has traditionally described public safety as achieved through investments that deter adversaries. Deterrence is however ineffective, and preemptive defense is required, when a population of intended victims confronts supreme-value suicide terror. A moral dilemma...

This Paper seeks to analyse the nature of the terrorist threat following 9/11, and to explore the implications for defense R&D policy. First, it reviews the defining trends of defense R&D since the Cold War, and brings in pertinent empirical evidence: the US accumulated during the 1990s a...

This Paper analyses the effect of terror on the economy. Terror endangers life such that the value of the future relative to the present is reduced. Hence, due to a rise in terror activity, investment goes down, and in the long run income and consumption go down as well. Governments can offset...

What are the main causes of international terrorism? The lessons from the surge of academic research that followed 9/11 remain elusive. The careful investigation of the relative roles of economic and political conditions did little to change the fact that existing econometric estimates diverge...

The military drawdown program of the early 1990s provides an opportunity to obtain estimates of personal discount rates based on large numbers of people making real choices involving large sums. The program offered over 65,000 separatees the choice between an annuity and a lump-sum payment....

We use 6-digit bilateral trade data to document the effect of WTO/GATT membership on the extensive and intensive product margins of trade. We construct gravity equations for the two product margins where the specifications of these gravity equations are motivated by the model of Eaton and Kortum...

This paper challenges the contention that WTO rules had much impact on state behaviour during the recent global economic crisis. Evidence on the variety of discrimination implemented by governments, characteristics of the recent systemic crisis, as well as on certain, often overlooked features...

Several factors potentially responsible for the failure to conclude the Doha Round of multilateral trade negotiations are analysed. A two-stage negotiation and ratification game between the “North” (industrialised countries) and the “South” (developing countries) is employed and...

One of the central questions of policy interest in recent years has been how many dollars of the inflation-adjusted price of oil must be attributed to speculative demand for oil stocks at each point in time. We develop statistical tools that allow us to address this question, and we use these...