What is the economic cost of terrorism?

It feels frivolous to ask that question after the horrific Paris attacks, but it is one of the central issues with which policy makers and investors are grappling.

The conventional wisdom is that an act of terrorism accounts for a mere blip in economic damage. Economists often point to research showing that after the Madrid train bombings in 2004 and the London subway bombings in 2005, gross domestic product in those countries barely budged and showed little direct correlation to the attacks.

Even in the United States after the Sept. 11 attacks, consumption remained relatively stable, though investment fell. (There have been bigger impacts on places like Bali and Tunisia, whose economies depend heavily on foreign tourism.)

If the stock market can be considered a barometer of economic confidence, it is remarkable to see how quickly it typically rebounds after a terrorist event. In the case of New York, Madrid and London, the market briefly dropped but then recovered, often within weeks. In the case of Sept. 11, the S.&P. 500-stock index returned to where it had been before the attacks just 30 days later.