IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/16984.html
   My bibliography  Save this paper

The Economic Costs of Conflict: A Production Network Approach

Author

Listed:
  • Couttenier, Mathieu
  • Monnet, Nathalie
  • Piemontese, Lavinia

Abstract

A novel approach is presented for estimating the economic costs of conflict, in which the production network serves a first-order mechanism through which the disruptive effect of localized conflict spreads to firms in peaceful areas. The method is applied to the Maoist insurgency in Eastern India during the period 2000-2009. We document the negative impact of conflict on firms' behavior, which spreads to firms in peaceful areas through input-output connections. We then apply a model of production networks in order to quantify the overall impact of conflict by taking these propagation effects into account. We find that the Maoist insurgency results in an average aggregate output loss of 3.8 billion USD per year. Interestingly, 73% of the loss is explained by network propagation.

Suggested Citation

  • Couttenier, Mathieu & Monnet, Nathalie & Piemontese, Lavinia, 2022. "The Economic Costs of Conflict: A Production Network Approach," CEPR Discussion Papers 16984, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:16984
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP16984
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Conflict; Firms; Production network; Aggregate output loss;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:16984. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.