Economic Policy Review

Terrorism and the Resilience of Cities

November 2002Volume 8, Number 2
JEL classification: R1, R12, H56

Authors: James Harrigan and Philippe Martin

The September 11 attacks in New York and Washington have forced Americans to confront the fact that to live or work in a large city is to be at greater risk of large-scale terrorism. What do these risks, and the public perception of them, imply for cities in general and the future of NewYorkCity in particular? In this article, the authors begin their exploration of this issue by examining why cities exist in the first place. To conduct their analysis, they simulate two key theoretical models of economic geography, using data that approximate the characteristics of a major U.S. city as well as estimates of the costs of the September11 attacks. The authors conclude that the very forces that lead to city formation also lead cities to be highly resilient in the face of catastrophes such as terrorist attacks. They argue that NewYorkCity in particular is likely to continue to thrive despite any ongoing terrorist threat.

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