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Pakistan with highest number of terrorism related deaths of any country over the past decade, the number exceeding the total terrorism related deaths for both the European and North American continents, provides an ideal laboratory to study impact of terrorism on the macroeconomy (GTD, 2012). Quasi-Structural VAR, VECM, Impulse Response Functions and Granger-Causality tests on a sample that covers over 4500 terrorist incidents and consequent 10, 200 deaths [from 1973 to 2010] are employed todoi:10.1080/10242694.2013.793529 fatcat:xpbxtjj62fdxhg6rzwhvm6u54u