An overview of the economics literature on terrorism is presented. Papers are classified as to their macro versus micro and empirical versus theoretical emphasis. Although subjective, this classification makes clear where additional contributions can be made: Most of the existing studies are of an empirical nature and examine the consequences of terrorist attacks at the aggregate level and in specific sectors of economic activity. In the case of the micro-based studies, the mix of papers is more balanced. The article concludes with a list of twelve papers that summarize what is now known about economics and terrorism. These twelve papers are suggestive of the broad range of questions addressed and the progress made, constituting a very useful introduction to the literature.