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The Economic Cost of Nationalism

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  • Tao, Miaomiao
  • Saadaoui, Jamel

Abstract

We identify the negative influence of nationalist sentiment on economic growth. Our cross-country evidence confirms the growth-depressing effect of nationalism, projecting that economic growth has been constrained by roughly 12 percent over thirty years. This conclusion is robust across various tests. Paradoxically, nationalism helps reduce environmental damage, lowering overall emissions and intensity, especially in the building, industry, and transportation sectors. We observe that the effect of nationalism in cutting carbon emissions weakens slightly as GDP per capita rises. However, in poorer countries, this environmental impact remains steady regardless of changes in income, suggesting nationalism’s role in reducing emissions stays stable despite economic growth.

Suggested Citation

  • Tao, Miaomiao & Saadaoui, Jamel, 2025. "The Economic Cost of Nationalism," MPRA Paper 125113, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:125113
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    Keywords

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    JEL classification:

    • F5 - International Economics - - International Relations, National Security, and International Political Economy
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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