Topics in Middle Eastern and North African Economies
Title
Three Macroeconomic Trends around the Onset of Armed Conflict in Developing Economies
Document Type
Article
Publication Date
5-2019
Abstract
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.
Journal Title
Topics in Middle Eastern and North African Economies
Publisher
Middle East Economic Association and Loyola University Chicago
Volume
21
Issue
1
Recommended Citation
Lederman, Daniel and Rojas, Claudio J., "Three Macroeconomic Trends around the Onset of Armed Conflict in Developing Economies". Topics in Middle Eastern and North African Economies, electronic journal, 21, 1, Middle East Economic Association and Loyola University Chicago, 2019, http://www.luc.edu/orgs/meea/
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This work is licensed under a Creative Commons Attribution 3.0 License.
Copyright Statement
© 2019 The Authors
Comments
Presentation of the articles in the Topics in Middle Eastern and North African Economies was made possible by a limited license granted to Loyola University Chicago and Middle East Economics Association from the authors who have retained all copyrights in the articles.