The lasting economic impacts of war (opens in new tab)

Wars leave deep and lasting scars on economies. Using data for 115 conflicts across 145 countries over the past 75 years, we document large and persistent declines in output, investment, and trade following the onset of war, with no evidence of recovery even a decade later. Government revenues collapse while spending remains stable, forcing reliance on inflationary finance and short-term debt. Our findings show that the true cost of war extends far beyond the battlefield, reshaping fiscal and...