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The Temporal Links between Conflict and Economic Activity

Author

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  • S. BROCK BLOMBERG

    (Department of Economics Wellesley College)

  • GREGORY D. HESS

    (Department of Economics Oberlin College)

Abstract

Data from 152 countries from 1950 to 1992 are used to estimate the joint determination of external conflict, internal conflict, and the business cycle. Results show that the occurrence of a recession alone will significantly increase the probability of internal conflict, and when combined with the occurrence of an external conflict, recessions will further increase the probability of internal conflict. These results are obtained from estimates of a Markov probability model in which transitions between states of peace and conflict influence each other and the state of the economy. Strong evidence emerges that the internal conflict, external conflict, and the state of the economy are not independent of one another. The results suggest that recessions can provide the spark for increased probabilities of internal and external conflict, which in turn raise the probability of recessions. Such dynamics are suggestive of a poverty-conflict trap-like environment.

Suggested Citation

  • S. Brock Blomberg & Gregory D. Hess, 2002. "The Temporal Links between Conflict and Economic Activity," Journal of Conflict Resolution, Peace Science Society (International), vol. 46(1), pages 74-90, February.
  • Handle: RePEc:sae:jocore:v:46:y:2002:i:1:p:74-90
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    Cited by:

    1. Levy, Amnon & Faria, João Ricardo, 2002. "Conflict, Political Structure and Economic Growth in Dual-Population Lands," Economics Working Papers wp02-19, School of Economics, University of Wollongong, NSW, Australia.
    2. Jie Cai & Lian An, 2014. "Is Protectionism Rational Under the Financial Crisis? Analysis from the Perspective of International Political Relations," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(3), pages 278-299, March.
    3. Timothy Besley & Hannes Mueller, 2012. "Estimating the Peace Dividend: The Impact of Violence on House Prices in Northern Ireland," American Economic Review, American Economic Association, vol. 102(2), pages 810-833, April.
    4. Militiades N. Georgiou & Nicholas Kyriazis & Emmanouil M. L. Economou, 2015. "Democracy, Political Stability and Economic performance. A Panel Data Analysis," Journal of Risk & Control, Risk Market Journals, vol. 2(1), pages 1-18.
    5. Soliman, Ibrahim, 2003. "Diagnosis and Challenges of the Sustainable Agricultural Development in Egypt," MPRA Paper 66629, University Library of Munich, Germany.
    6. S. Brock Blomberg & Gregory D. Hess & Akila Weerapana, 2002. "Terrorism From Within: An Economic Model of Terrorism," Claremont Colleges Working Papers 2002-14, Claremont Colleges.
    7. Lopes da Fonseca, Mariana & Baskaran, Thushyanthan, 2015. "Re-evaluating the economic costs of conflicts," Center for European, Governance and Economic Development Research Discussion Papers 246, University of Goettingen, Department of Economics.
    8. repec:kap:pubcho:v:179:y:2019:i:3:d:10.1007_s11127-018-0586-5 is not listed on IDEAS
    9. Syed Jawad Hussain Shahzad & Muhammad Zakaria & Mobeen Ur Rehman & Tanveer Ahmed & Bashir Ahmed Fida, 2016. "Relationship Between FDI, Terrorism and Economic Growth in Pakistan: Pre and Post 9/11 Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(1), pages 179-194, May.
    10. Nicholas Sambanis, 2002. "A Review of Recent Advances and Future Directions in the Quantitative Literature on Civil War," Defence and Peace Economics, Taylor & Francis Journals, vol. 13(3), pages 215-243.
    11. Luo, Shali & Miller, J. Isaac, 2014. "On the spatial correlation of international conflict initiation and other binary and dyadic dependent variables," Regional Science and Urban Economics, Elsevier, vol. 44(C), pages 107-118.
    12. Patricia Justino, 2009. "The Impact of Armed Civil Conflict on Household Welfare and Policy Responses," HiCN Working Papers 61, Households in Conflict Network.
    13. Blomberg, S. Brock & Hess, Gregory D. & Orphanides, Athanasios, 2004. "The macroeconomic consequences of terrorism," Journal of Monetary Economics, Elsevier, vol. 51(5), pages 1007-1032, July.
    14. repec:spr:empeco:v:54:y:2018:i:4:d:10.1007_s00181-017-1276-8 is not listed on IDEAS
    15. Thierry Deffarges, 2003. "Sur la nature et les causes du terrorisme. Une revue de la littérature économique," Revue Tiers Monde, Programme National Persée, vol. 44(174), pages 369-392.
    16. Ossama Mikhail, 2004. "No More Rocking Horses: Trading Business-Cycle Depth for Duration Using an Economy-Specific Characteristic," Macroeconomics 0402026, University Library of Munich, Germany.
    17. Elie Appelbaum, 2013. "The Dynamics of Hate and Violence," Working Papers 2013_01, York University, Department of Economics.
    18. Blomberg, S. Brock & Hess, Gregory D. & Weerapana, Akila, 2004. "Economic conditions and terrorism," European Journal of Political Economy, Elsevier, vol. 20(2), pages 463-478, June.
    19. Levy, Amnon, 2004. "Trucefully Yours: Hatred and the Prospects of Genuine and Stable Peace," Economics Working Papers wp04-06, School of Economics, University of Wollongong, NSW, Australia.
    20. Blomberg S. Brock & Hess Gregory D., 2009. "Estimating the Macroeconomic Consequence of 9/11," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 15(2), pages 1-26, July.
    21. Philippe Hugon, 2003. "Les conflits armés en Afrique : mythes et limites de l'analyse économique," Revue Tiers Monde, Programme National Persée, vol. 44(176), pages 829-856.
    22. Nicholas Staines, 2004. "Economic Performance Over the Conflict Cycle," IMF Working Papers 04/95, International Monetary Fund.
    23. William F. Shughart, 2011. "Terrorism in Rational Choice Perspective," Chapters, in: Christopher J. Coyne & Rachel L. Mathers (ed.), The Handbook on the Political Economy of War, chapter 8, Edward Elgar Publishing.
    24. Patricia Justino, 2006. "On the Links between Violent Conflict and Chronic Poverty: How Much Do We Really Know?," HiCN Working Papers 18, Households in Conflict Network.

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