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Collateral Damage: Trade Disruption and the Economic Impact of War
Abstract
Conventional wisdom in economic history suggests that conflict between countries can be enormously disruptive of economic activity, especially international trade. We study the effects of war on bilateral trade with available data extending back to 1870. Using the gravity model, we estimate the contemporaneous and lagged effects of wars on the trade of belligerent nations and neutrals, controlling for other determinants of trade, as well as the possible effects of reverse causality. We find large and persistent impacts of wars on trade, national income, and global economic welfare. We also conduct a general equilibrium comparative statics exercise that indicates costs associated with lost trade might be at least as large as the conventionally measured direct costs of war, such as lost human capital, as illustrated by case studies of World Wars I and II.
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Cites
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Bertrand, M., Duflo, E., & Mullainathan, S. (2004) · The Quarterly Journal of Economics · doi:10.1162/003355304772839588 · Cited by 10,641
Anderson, J. E., & van Wincoop, E. (2004) · Journal of Economic Literature · doi:10.1257/0022051042177649 · Cited by 2,524
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Gravity Equations: Workhorse,Toolkit, and Cookbook
Head, K., & Mayer, T. (2014) · Handbook of International Economics · doi:10.1016/b978-0-444-54314-1.00003-3 · Cited by 1,565
Research on the Impact of Geopolitical Instability on Russian Trade
Talamanov, P. (2024) · International Journal of Innovative Science and Research Technology (IJISRT) · doi:10.38124/ijisrt/ijisrt24jul1500 · Cited by 959
The impact of the 1918 Spanish flu epidemic on economic performance in Sweden
Karlsson, M., Nilsson, T., & Pichler, S. (2014) · Journal of Health Economics · doi:10.1016/j.jhealeco.2014.03.005 · Cited by 253
The economic costs of military conflict
Smith, R. P. (2014) · Journal of Peace Research · doi:10.1177/0022343313496595 · Cited by 63
Metadata
- Authors
- Glick, R., & Taylor, A. M.
- Venue
- Review of Economics and Statistics
- Publisher
- MIT Press - Journals
- Published
- 2010-02
- Volume
- 92
- Issue
- 1
- Pages
- 102-127
- ISSN
- 0034-6535 (ISSN-L)
- 1530-9142
- OpenAlex
- W3124050439
- Cited by
- 542
- References
- 2
- FWCI
- 35.17
- Type
- journal article
- Language
- en
- Open access
- closed
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