The Price of War

Jonathan Federle, Andre Meier, Müller, Gernot and Moritz Schularick
Authors registered in the RePEc Author Service: Gernot J. Müller

No 18834, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We assemble a new data set spanning more than 150 years and 60 countries to study the economic impact of interstate war. The economic costs of war are not confined to the war site, where output on average declines by 20 percent and inflation increases persistently by almost 10 percentage points. There are strong spillovers to nearby countries which decline with geographic distance---both for belligerent and third countries. We rationalize these patterns in an international business cycle model: As war destroys the productive capacity of the war site, trade with nearby economies collapses, generating an endogenous supply-side contraction abroad.

Keywords: Spillovers; Distance; International transmission (search for similar items in EconPapers)
JEL-codes: E50 F40 F50 (search for similar items in EconPapers)
Date: 2024-02
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Related works:
Journal Article: The Price of War (2026)
Working Paper: The price of war (2024)
Working Paper: The price of war (2024)
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