Human Development, Main Macroeconomic Variables and Terrorism in Middle East and North Africa: A Panel Causality Analysis

Abstract

Terrorism has still a serious problem for many countries despite the improvements in combat with terrorism during the recent years. Many institutional, economic, and social factors have been documented as the possible causes of terrorism in the related literature. This research explores the reciprocal interaction between human development, main macroeconomic variables of real GDP per capita, unemployment, youth unemployment, and inflation and terrorism in Middle East and North African countries over the 2005-2019 period through causality analysis with cross-sectional dependence and heterogeneity. The causality analysis discovered a reciprocal interaction between human development, unemployment, youth unemployment, inflation and terrorism and a significant causality from real GDP per capita to the terrorism.