Three Macroeconomic Trends Around the Onset of Armed Conflict in Developing Economies

This paper studies the evolution of three macroeconomic variables (namely current fiscal expenditures, public debt, and consumer-price inflation) around the time of the onset of armed conflicts during 1950-2016. The authors compare the performance...

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Main Authors:	Lederman, Daniel, Rojas, Claudio J.
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2018
Subjects:	ARMED CONFLICT INFLATION PUBLIC DEBT GOVERNMENT CONSUMPTION PUBLIC EXPENDITURE MACROECONOMIC POLICY FISCAL EXPENDITURE CONFLICT-AFFECTED STATES
Online Access:	http://documents.worldbank.org/curated/en/763071542314874296/Three-Macroeconomic-Trends-Around-the-Onset-of-Armed-Conflict-in-Developing-Economies http://hdl.handle.net/10986/30875

id	okr-10986-30875
recordtype	oai_dc
spelling	okr-10986-308752021-06-08T14:42:45Z Three Macroeconomic Trends Around the Onset of Armed Conflict in Developing Economies Lederman, Daniel Rojas, Claudio J. ARMED CONFLICT INFLATION PUBLIC DEBT GOVERNMENT CONSUMPTION PUBLIC EXPENDITURE MACROECONOMIC POLICY FISCAL EXPENDITURE CONFLICT-AFFECTED STATES This paper studies the evolution of three macroeconomic variables (namely current fiscal expenditures, public debt, and consumer-price inflation) around the time of the onset of armed conflicts during 1950-2016. The authors compare the performance of these variables in conflict-afflicted economies with economies that did not experience social conflict. The analyses cover episodes of conflict from around the world and study the evolution of these variables during the five years prior to and five years after the onset of conflicts. Further, four alternative definitions of social conflict are used to ascertain the robustness of the econometric results. The evidence suggests that current fiscal expenditures and public debt (both as a share of gross domestic product) in conflict-afflicted economies tend to be higher than in non-conflict economies prior to the onset of conflict, begin to rise further prior to the date of the onset of conflict, and stay relatively high after the onset of conflict. In contrast, there is little evidence that inflation is higher in conflict-afflicted economies, prior to or after the onset of conflict. These differential trends between conflict-afflicted and non-conflict economies shed new light on the existing literature on macroeconomic populism, and on key macroeconomic aspects of the economics of post-conflict reconstruction. 2018-11-26T17:45:55Z 2018-11-26T17:45:55Z 2018-11 Working Paper http://documents.worldbank.org/curated/en/763071542314874296/Three-Macroeconomic-Trends-Around-the-Onset-of-Armed-Conflict-in-Developing-Economies http://hdl.handle.net/10986/30875 English Policy Research Working Paper;No. 8647 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Middle East and North Africa
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ARMED CONFLICT INFLATION PUBLIC DEBT GOVERNMENT CONSUMPTION PUBLIC EXPENDITURE MACROECONOMIC POLICY FISCAL EXPENDITURE CONFLICT-AFFECTED STATES
spellingShingle	ARMED CONFLICT INFLATION PUBLIC DEBT GOVERNMENT CONSUMPTION PUBLIC EXPENDITURE MACROECONOMIC POLICY FISCAL EXPENDITURE CONFLICT-AFFECTED STATES Lederman, Daniel Rojas, Claudio J. Three Macroeconomic Trends Around the Onset of Armed Conflict in Developing Economies
geographic_facet	Middle East and North Africa
relation	Policy Research Working Paper;No. 8647
description	This paper studies the evolution of three macroeconomic variables (namely current fiscal expenditures, public debt, and consumer-price inflation) around the time of the onset of armed conflicts during 1950-2016. The authors compare the performance of these variables in conflict-afflicted economies with economies that did not experience social conflict. The analyses cover episodes of conflict from around the world and study the evolution of these variables during the five years prior to and five years after the onset of conflicts. Further, four alternative definitions of social conflict are used to ascertain the robustness of the econometric results. The evidence suggests that current fiscal expenditures and public debt (both as a share of gross domestic product) in conflict-afflicted economies tend to be higher than in non-conflict economies prior to the onset of conflict, begin to rise further prior to the date of the onset of conflict, and stay relatively high after the onset of conflict. In contrast, there is little evidence that inflation is higher in conflict-afflicted economies, prior to or after the onset of conflict. These differential trends between conflict-afflicted and non-conflict economies shed new light on the existing literature on macroeconomic populism, and on key macroeconomic aspects of the economics of post-conflict reconstruction.
format	Working Paper
author	Lederman, Daniel Rojas, Claudio J.
author_facet	Lederman, Daniel Rojas, Claudio J.
author_sort	Lederman, Daniel
title	Three Macroeconomic Trends Around the Onset of Armed Conflict in Developing Economies
title_short	Three Macroeconomic Trends Around the Onset of Armed Conflict in Developing Economies
title_full	Three Macroeconomic Trends Around the Onset of Armed Conflict in Developing Economies
title_fullStr	Three Macroeconomic Trends Around the Onset of Armed Conflict in Developing Economies
title_full_unstemmed	Three Macroeconomic Trends Around the Onset of Armed Conflict in Developing Economies
title_sort	three macroeconomic trends around the onset of armed conflict in developing economies
publisher	World Bank, Washington, DC
publishDate	2018
url	http://documents.worldbank.org/curated/en/763071542314874296/Three-Macroeconomic-Trends-Around-the-Onset-of-Armed-Conflict-in-Developing-Economies http://hdl.handle.net/10986/30875
_version_	1764473134238400512

Three Macroeconomic Trends Around the Onset of Armed Conflict in Developing Economies

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