Abstract:

In study, the impact of terrorist incidents on misery index were analyzed between 2002-2018 in Turkey and Eurasian countries. In the analysis, second generation panel data analysis methods that take into account cross sectional dependency and heterogeneity were used. Firstly, it was investigated whether there is cross sectional dependency in the model. Subsequently, the stationarity of the series was investigated with the CADF unit root test, then the homogeneity test was applied. The long-term relationship between the variables was analyzed by Westerlund (2007) bootstrap panel cointegration test. In the bootstrap panel cointegration test results, it was concluded that there is cointegration relationship between the terrorist incidents and misery index in Turkey and Eurasian countries. The increase in terrorist incidents throughout the panel increases misery index. According to the findings obtained on the basis of countries, the effect of terrorism on the misery index is positive in Azerbaijan, Belarus, Georgia, Russia, Ukraine and Turkey (the increase in terrorist incidents increases misery index); it is negative in Armenia, Kyrgyzstan and Moldova (the increase in terrorist incidents reduces misery index). However, a statistically insignificant relationship was found in Azerbaijan, Ukraine and Moldova. Later, Dumitrescu-Hurlin Granger panel causality test was applied and the test result showed that there is a one-way causality relationship from terrorist incidents to economic discontent index. In this context, it can be said that the increase in terrorist incidents increased the misery index in Turkey and Eurasian countries. Therefore, in order to reduce the misery index caused and increased by terrorist incidents, which are a social discontent indicator in Turkey and Eurasian countries, a policy proposal can be made that if the macroeconomic costs of terrorism on the said countries can be determined, this situation can guide the solution of the problem in these countries.

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