The Economic Consequences of a War in Iraq

William D. Nordhaus ()

No 9361, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Much has been written about the national-security aspects of a potential conflict with Iraq, but there are no studies of the cost. A review of several past wars indicates that nations historically have consistently underestimated the cost of military conflicts. This study reviews the potential costs of a conflict including the postwar expenses that might be required for occupation, humanitarian assistance, reconstruction, nation-building along with the implications for oil markets and macroeconomic activity. It considers two potential scenarios that span the potential outcomes, ranging from a short and relatively conflict-free case to protracted conflict with difficult and expensive postwar reconstruction and occupation. The estimates of the cost to the United States over the decade following hostilities range from $100 billion to $1.9 trillion.

JEL-codes: H56 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe
Date: 2002-12
Note: EFG PE
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