Template-Type: ReDIF-Paper 1.0
Author-Name: Alan M. Taylor
Author-Name-First: Alan M.
Author-Name-Last: Taylor
Author-Name: Reuven Glick
Author-Name-First: Reuven
Author-Name-Last: Glick
Author-Workplace-Name: Department of Economics, University of California Davis
Title: Collateral Damage: Trade Disruption and the Economic Impact of War
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.
Length: 54
File-URL: https://repec.dss.ucdavis.edu/files/NQvTZwSJaLPKyNhBg84anUDk/05-15.pdf
File-Format: application/pdf
Number: 309
Classification-JEL: D74, F02, F10, F14, H56, N40, N70
KeyWords: trade
Creation-Date: 20050731
Handle: RePEc:cda:wpaper:309