Does a cutback in external funding reduce incidence of foreign sponsored terrorism?

Abstract

It is shown that a cutback in external funding would reduce the incidence of foreign sponsored terrorism in the home country, but the magnitude of the reduction will be somewhat smaller than normally expected because of the precipitous fall in the price of terror caused by home currency depreciation.

Keywords:

• illegal transfer
• exchange rate
• terrorism

JEL Classification:

• F3
• H5

Acknowledgement

I sincerely thank an anonymous referee and the editor of the journal for helpful comments and suggestions.