Financial markets barely registered this week's attacks in Brussels, which killed more than 30 people, a sign that investors think the economic impact on Belgium and across Europe as a whole will be limited. Recent history suggests they may be right.
The experience of terror attacks in Europe in the past decade have helped the business community keep their cool in the face of horrors like this week's deadly bombings at the Brussels airport and subway.
Firms have gotten better in their responses. From identifying personnel, to clearing offices or sanctioning remote working, even at recovery sites, they manage to contain the disruption. The people have shown a willingness to get back to life as usual as soon as they can, whether it be shopping, boarding a train or having a meal. And governments learn to put in place security measures they hope will deter more attacks.
4) I mean I find this rather intuitive. The more attacks occur, the more desensitized nations will become to them. I would relate it to any other type of conditioning. Furthermore, for the most part terrorist attacks are random occurrences and could happen at any time (could be wrong here this is an assumption). Maybe non-reactions could be a good thing. What I mean is if nations continually fail to react to mass acts of terror, will consequential seem to have less validity to their cause.
ReplyDeleteI agree with the logic that as more attacks happen we become more desensitized and seem to reflect less fear within our markets. I do however wonder if the world markets would act differently if an attack happened somewhere else in the world such as the United States. Even if the attack was very similar to the one carried out in Belgium I think that investors would view it very differently. With a majority of these attacks seemingly being in Europe, an attack on American soil would certainly incite more fear within the markets. I would agree with the sentiment that the larger reaction an attack creates, the larger the effect will be on the economy.
ReplyDeleteI think this response by the european market is driven less by the severity and abundance of events but that consumers have come to trust their governments and each other during times of distress and know they can bounce back like the other before them with enough support. With this occuring consumers always feel better about the future, during times of crisis and otherwise.
ReplyDeleteI agree that the effects are minimal on the markets as people have experienced these type of tragadies before, but I don't believe it is because we have come to trust our government, more so rely on them. Also, I think a large part of this is due to how people no longer have such strong nationalistic identities, as open borders in the EU along with the acceptance of all immigrants (both the innocent and not so innocent) plays into this open mindness. You can see this in how people are less involved in many elections with how the supporters who make it on the news are the extreme left or right most of the time.
ReplyDeleteThe calmness we see in the markets isn't so much trust in the government, but an example of how desensitized people have come to atrocities and reliance on how the government will "fix" the problem. I don't think we would see such calm reactions amongst popultions all over the world if people still had a strong sense of nationalism (which can be good, but also bad, think WW1,2) and more active participation in government by each countries population.