The Macroeconomic Costs of Conflict

Natalija Novta and Evgenia Pugacheva

No 2020/110, IMF Working Papers from International Monetary Fund

Abstract: Macroeconomic costs of conflict are generally very large, with GDP per capita about 28 percent lower ten years after conflict onset. This is overwhelmingly driven by private consumption, which falls by 25 percent ten years after conflict onset. Conflict is also associated with dramatic declines in official trade, with exports (imports) estimated to be 58 (34) percent lower ten years after conflict onset. The onset of conflict often also induces significant refugee outflows to neighboring non-advanced countries in the short run, and relatively small but very persistent refugee outflows to advanced countries over the long run. Finally, we stress that conflict should be defined in terms of the number of people killed relative to the total population. The traditional definition of conflict—based on the absolute number of deaths—skews the sample toward low-intensity conflicts in large countries, thereby understating the negative effects of conflict from a macroeconomic perspective.

Keywords: WP; number; conflict onset; battle; refugee; log GDP; refugee flow; conflict country; GDP decline; refugee status; number of refugee; country well; refugee dynamics; country size; conflict GDP; country population; asylum country; Public expenditure review; Consumption; GDP forecasting; Private consumption; Global; Middle East; Sub-Saharan Africa; conflict; war; growth; trade; migration; destination country population; IMF country expert (search for similar items in EconPapers)
Pages: 26
Date: 2020-06-26
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=49515 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2020/110

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().