Collateral Damage: Trade Disruption and the Economic Impact of War

Alan Taylor and Reuven Glick

No 309, Working Papers from University of California, Davis, Department of Economics

Abstract: Conventional wisdom in economic history suggests that conflict between countries can beenormously disruptive of economic activity, especially international trade. Yet nothing is knownempirically about these effects in large samples. We study the effects of war on bilateral trade foralmost all countries with available data extending back to 1870. Using the gravity model, weestimate the contemporaneous and lagged effects of wars on the trade of belligerent nations andneutrals, controlling for other determinants of trade. We find large and persistent impacts of warson trade, and hence on national and global economic welfare. A rough accounting indicates that suchcosts might be of the same order of magnitude as the """"direct"""" costs of war, such as lost humancapital, as illustrated by case studies of World War I and World War II.

Keywords: trade (search for similar items in EconPapers)
JEL-codes: D74 F02 F10 F14 H56 N40 N70 (search for similar items in EconPapers)
Pages: 54
Date: 2005-07-31
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (35)

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Related works:
Working Paper: Collateral Damage: Trade Disruption and the Economic Impact of War (2005)
Working Paper: Collateral damage: trade disruption and the economic impact of war (2005)
Working Paper: Collateral Damage: Trade Disruption and the Economic Impact of War (2005)
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