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Views tropical forests as providing a number of outputs for the host country and the world at large. Activities to curb deforestation yield private goods, local (country‐specific) public goods, and global public goods. Markets can operate with respect to the private goods, while nations are motivated to strike bargains with one another with respect to the country‐specific public goods. Inefficiency or suboptimality stems from the global public goods that preservation activities of one country confer on another. Collective action at the transnational level is needed to address these global public goods. This suboptimality can be attenuated if the developed countries establish property rights to genetic material gathered from the rain forests. Much can be done to promote allocative efficiency and these actions should be accomplished prior to the institution of a supranational linkage. Since the bulk of the global public benefits are derived by the developed countries, they are in a weak bargaining position with respect to the shrinking rain forests. An early agreement is in their interests even if the bargain favours the tropical countries.

Production‐cost duality was first introduced by Ronald Shephard (1953) in his seminal study, Cost and Production Functions. The application of duality to production and cost was extended by Uzawa (1962, 1964). However, not until the 1970s did the Shephard‐Uzawa duality analysis achieve its influential role in modern microeconomic thought. In simple words, the Shephard‐Uzawa duality theorem indicates that a firm's cost function summarizes all of the relevant features of the production technology, whereas the firm's production function contains all of the relevant features of the cost function for each set of input and output prices. If certain standard technical conditions (i.e., relating to convexity and continuity) are satisfied, then the theorem implies that there is a one‐to‐one relationship between points on the cost surface and points on the production surfaces.

Terrorist events are unforeseen and have the potential to shake and rattle markets and investors. The purpose of this study is to examine whether major terrorist incidents have affected the Economic Sentiment Indicator (ESI) in four European countries.

An index is constructed that weights the severity of each event and then used to evaluate through the use of vector autoregressive and impulse response analysis estimation techniques whether or not and to what extent the ESI has been affected.

Effects were more pronounced and evident in the case of France and Germany while the ESI in Spain and Great Britain did not appear to be particularly affected by terrorist incidents.

The effects of terrorism on economic sentiment in other countries will provide additional evidence that will allow more robust and conclusive statistical inferences.

The impact of terrorist activity on the ESI for the four European countries studied here has not been examined before using VAR and impulse response analysis.

International security is a constant threat to the pursuit of economic optimum. In the traditional economic analysis history, states are seen as agents in constant search for power, which leads to the emergence of conflicts of interests. The modern concept of security can be defined as the economic study of all the risks of short, medium and long term on the functioning of economic and social life. It can be divided into four sublevels: individual security, national security, international security and global security. The adoption of an enlarged approach to international security by integrating economic and environmental conditions highlights the expression of new collective priorities. Today, theories of security take into account the economic, human and social relationships, societal priorities and the balance of power in the international system. Human security implies a multi-disciplinary analysis, including human rights, state organisation, international relations and strategic studies. Security and sustainable development are deeply interconnected, which involves bearable production conditions for the environment in the long term, the end of extreme poverty, the creation of social stability and the rejection of discrimination.

The scourge of terrorism has situated as one of the major risks and concerns for policy makers and authorities in the Western hemisphere. The attacks to WTC marked not only a first attack in the US soil but the prelude of a set of attacks perpetrated in the European urban metropolises. Over years, the classic literature punctuated on the negative impact of terrorism in the tourist destination. Recently, some voices have questioned this assumption holding that under some conditions the tourist demands recover to the earlier levels before the crisis. This chapter discusses critically not only the differentiation between risks and threats but also the different faces of terrorism. We also propose a model based on three dimensions: terrorism as a risk, terrorism as a threat and terrorism as a worry. As a conceptual model, the resulted hypotheses and ideas should be empirically validated in next layouts.