MACROECONOMIC ASPECTS OF CONFLICT

• Main Author: Lenz, Eric Daniel
• Format: Others
• Published: OpenSIUC 2015
• Subjects: civil war; conflict; financial crises; international growth; onset; severity
• Online Access: https://opensiuc.lib.siu.edu/dissertations/1115; https://opensiuc.lib.siu.edu/cgi/viewcontent.cgi?article=2119&context=dissertations

In the following papers I propose to construct economic models that incorporate the disastrous effect of conflict. I model conflict theoretically in a Solow growth model and empirically in a GDP per worker growth model, in a civil war onset model and a model for civil war’s severity. The first chapter theoretically and empirically analyzes economic growth with conflict in the context of the Mankiw et al. (1992) adaptation of the Solow growth model and the natural resource growth model by Sachs and Warner (1995). I incorporate a variable of capital destruction in the physical and human capital accumulation equations and derive coherent theoretical and empirical results. The second chapter considers the onset of civil war across all countries and specific subsamples of countries from 1970 to 2007. The onset of war is modeled using economic and financial variables in addition to grievance variables from the political science literature to ascertain the extent to which financial crises and hyperinflation can bring about civil war. I estimate using panel time-series logistic regression techniques and discover the risk of conflict in Africa, Asia, highly-indebted poor countries, and low income countries. Some civil wars are fought for government control and others are fought over local issues - both types of war are controlled for with their own determinants. The third chapter determines factors that significantly affect the severity of civil wars from year to year. I employ the same IV/GMM estimation techniques from Chapter 1 to discover the role of financial crises, hyperinflation, unemployment, and development assistance and aid in the severity of war.