Search Results
Working Paper
Battles and Diseases in the U.S. Civil War
Wars create short-term fluctuations in mortality. Belligerents might mitigate their own casualties with larger armies that hinder their opponent’s fighting ability. But diseases are frequent in wars and, thus, may reduce the benefits of larger armies. First, I analyze these competing mechanisms in a dynamic model of wartime attrition. Second, I calibrate the model using U.S. Civil War data and find that if the Union had fielded a 50%-larger army in 1861, Union casualties would have been marginally lower. The theory provides the insight for this quantitative result.
Working Paper
On the Economic Mechanics of Warfare
How do war-related expenditures affect economically-relevant outcomes at a war’s conclusion (e.g., prevailing side, duration, and casualties)? I present a model of attrition and characterize the effects of resources at a military conclusion (one side cannot fight anymore) and a political conclusion (one side quits). I analyze the Pacific War through the lenses of the model both theoretically and empirically. I find that a parsimonious parameterization reproduces well the aggregate patterns of destruction, measured in ship tonnage, for both belligerents.
Working Paper
Voluntary participation in a terror group and counterterrorism policy
A three-stage game investigates how counterterrorism measures are affected by volunteers’ choice in joining a terrorist group. In stage 1, the government chooses both proactive and defensive countermeasures, while looking ahead to the anticipated size and actions of terrorist groups. After radicalized individuals choose whether to join a terrorist group in stage 2, group members then allocate their time between work and terrorist operations. Based on wages and government counterterrorism, the game characterizes the extensive margin determining group size and the intensive margin ...
Working Paper
The economic effects of a potential armed conflict over Taiwan
This article examines the likely economic effects of a Chinese invasion or blockade of Taiwan for the U.S. and the world by considering historical precedents. Such a conflict would likely produce a flight-to-safety in the asset market, huge disruptions in international trade, and banking problems, and it would greatly exacerbate existing fiscal pressures. The authorities of the People’s Republic of China would probably try to sell U.S. and other western securities prior to a conflict to avoid sanctions on those assets. Such sales would be temporarily disruptive but would likely have only ...
Working Paper
Un-Fortunate Sons: Effects of the Vietnam Draft Lottery on the Next Generation's Labor Market
Can shocks to one generation propagate to the next? To answer this question, we study how the Vietnam draft lottery affected the next generation's labor market. Using the universe of federal tax returns, we link fathers from draft cohorts to their sons' outcomes and find that sons of fathers randomly called by the draft 1) have lower earnings and labor force participation than their peers, and 2) are more likely to volunteer for military service. These findings highlight the strong role family plays in human capital development and occupational choice. More generally, our results provide ...
Journal Article
The Economic Effects of a Potential Armed Conflict Over Taiwan
This article examines the likely economic effects of a Chinese invasion or blockade of Taiwan for the U.S. and the world by considering historical precedents. Such a conflict would likely produce a flight-to-safety in the asset market, huge disruptions in international trade, and banking problems, and it would greatly exacerbate existing fiscal pressures. The authorities of the People’s Republic of China would probably try to sell U.S. and other western securities prior to a conflict to avoid sanctions on those assets. Such sales would be temporarily disruptive but would likely have only ...
Working Paper
Subcontracting in Federal Spending: Micro and Macro Implications
This paper studies the critical but underexplored role of subcontracting in shaping the spatial and firm-level effects of federal government spending, introducing a new channel through which fiscal shocks propagate. Using newly available data on defense subcontracts merged with firm-level data, we document that a substantial share of spending is reallocated via subcontracts across regions beyond what is implied by the location of prime contracts. Firm-to-firm flows further show that subcontracting redirects spending toward large, goods-producing firms. We develop an empirical strategy that ...
Working Paper
Terrorism, Trade and Welfare: Some Paradoxes and a Policy Conundrum
We present a standard trade model and show that terrorism can be trade inducing, starting from autarky. In addition, terrorism can be shown to be welfare augmenting for a group of nations. Finally, we present some qualitative conditions that identify when a nation?s trade volume may rise (or fall) in response to a greater incidence of terrorism. Our trade and welfare results point to potential difficulties in international coordination of counterterrorism policy because of terrorism?s differential impact across nations.
Working Paper
Terms-of-Trade and Counterterrorism Externalities
This paper investigates the interplay of trade and terrorism externalities under free trade between a developed nation that exports a manufactured good to and imports a primary product from a developing nation. A terrorist organization targets both nations and reduces its attacks in response to a nation?s defensive counterterrorism efforts, while transferring some of its attacks abroad. Terms-of-trade considerations lead the developed nation to raise its counterterrorism level beyond the ?small-country? level, thus compounding its over provision of these measures. By contrast, the developing ...
Working Paper
Measuring Geopolitical Risk
We present a monthly indicator of geopolitical risk based on a tally of newspaper articles covering geopolitical tensions, and examine its evolution and effects since 1985. The geopolitical risk (GPR) index spikes around the Gulf War, after 9/11, during the 2003 Iraq invasion, during the 2014 Russia-Ukraine crisis, and after the Paris terrorist attacks. High geopolitical risk leads to a decline in real activity, lower stock returns, and movements in capital flows away from emerging economies and towards advanced economies. When we decompose the index into threats and acts components, the ...