Economics Seminar Economics (ESE) - 2023/2024

Interviene: Lavinia Piemontese, Università Bocconi 

Titolo: The economic costs of conflict: a production network approach

Abstract: We focus on the Maoist insurgency in Eastern India during 2000-2009 to develop a novel approach to estimate the economic costs of conflict, where the production network is a first-order mechanism through which the disruptive effect of localized conflict spreads to peaceful districts. We first estimate the local impact of conflict. We then apply a model of production networks to quantify the overall impact of conflict by taking network propagation into account. We find that the Maoist ninsurgency results in an average aggregate output loss of 3.8 billion USD per year. Quite remarkably, 73% of the loss is explained by network propagation.