12/25/2022 0 Comments Geodist databaseBlattman and Miguel 2010, Collier et al 2003). Traditionally, political scientists have used a threshold of one thousand battle-related deaths to classify whether a country has experienced a major conflict (e.g. state-based conflicts, non-state conflicts and onesided violence 4 and looks at the best estimates of the number of people killed, both civilians and combatants.Ĭhoosing a criterion to classify a country as having experienced conflict is not trivial. 3 In this paper, we primarily rely on the Uppsala Conflict Data Program (UCDP) Georeferenced Event Dataset to define our indicators of conflict incidence and onset. The rest of the paper is organized as follows: in Section II we present our definitions of conflict onset and incidence in Section III we look at conflict-related growth collapses and the effect on global GDP in Section IV we quantify the macroeconomic costs of conflict Section V concludes.Īn expansion of conflict research in both political science and economics has created excellent sources of conflict data. We argue that-from a macroeconomists’ perspective-this is the relevant conflict definition to use. Hence, we define conflict in terms of the percentage of the country’s total population that died in battle or as civilian casualties. A conflict with a thousand deaths could have almost no macroeconomic impact in a very large country, yet be a major destabilizing force in a small country. The standard definition of conflict in the literature is based on an absolute number of people killed (for example, 1,000 people killed to identify a major conflict), but this definition does not properly account for population size ( Mueller 2016). We further contribute to the literature by using new definitions of conflict onset and incidence based on the share of population killed. Throughout, we focus on a ten-year horizon after conflict outbreak. Lastly, we consider the impact of conflict on the number of refugees seeking shelter in neighboring countries and in advanced economies, which are typically located farther away from the epicenter of conflict. We look at the components of GDP by expenditure (private consumption, government spending, investment, and trade in goods), value added by sectors of the economy (manufacturing, services, agriculture) to determine the channels through which conflict affects aggregate GDP. We then conduct an empirical analysis of the dynamic effect of conflict on real GDP per capita. We also investigate what share of global GDP is attributed to countries in conflict, which has been shown to help explain errors in GDP forecasting ( Celasun et al. We start with stylized facts documenting the association between conflict and growth collapses, measured by the decline in real GDP relative to the pre-conflict growth forecast, based on the International Monetary Fund’s World Economic Outlook forecasts for each country. In this paper, we focus on the macroeconomic costs of conflict.
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