2006/09/06 by Gerald Schneider, Vera E. Troeger · 290 citations
Economics, Econometrics and Finance · #Alliance #Economics #Economy #Finance #Financial Risk and Volatility Modeling #Financial market #First world war #Global Financial Crisis and Policies #History #Law #Liberalism #Macroeconomics #Market Dynamics and Volatility #Political economy #Political science #Politics #Rational expectations #Spanish Civil War #Stock market #World War II
paper · open access · doi:10.1177/0022002706290430
published in Journal of Conflict Resolution 50(5), 623-645 (SAGE Publishing)
openalex publication_date 2006/09/06 · openalex created_date 2016/06/24 · openalex updated_date 2026/07/25
One of the perennial questions in the scientific study of war is how war affects the economy. The authors examine the influence that the political developments within three war regions had on global financial markets (CAC, Dow Jones, FTSE) from 1990 to 2000. They embed a rational expectation framework within commercial liberalism, a theoretical strand that tries to assess the interrelationship between war and economic exchanges. Time-series analyses account for the effects that the conflict between Israel and the Palestinians, the first confrontation of a U.S.-led alliance against Iraq, and the wars fought in Ex-Yugoslavia exerted. Using daily stock market data, the authors show that the conflicts affected the interactions at the core financial markets in the Western world negatively, if they had any systematic influence at all. They argue that these results lend some support to the rational expectations version of commercial liberalism.