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- Title
The Economic Costs of Conflict: A Case Study of the Basque Country.
- Authors
Abadie, Alberto; Gardeazabal, Javier
- Abstract
This article investigates the economic effects of conflict, using the terrorist conflict in the Basque Country as a case study. We find that, after the outbreak of terrorism in the late 1960's, per capita GDP in the Basque Country declined about 10 percentage points relative to a synthetic control region without terrorism. In addition, we use the 1998–1999 truce as a natural experiment. We find that stocks of firms with a significant part of their business in the Basque Country showed a positive relative performance when truce became credible, and a negative relative performance at the end of the cease-fire. (JEL D74, G14, P16)
- Subjects
PAIS Vasco (Spain); SPAIN; SOCIAL conflict; SPANISH economy; TERRORISM; STOCKS (Finance); ECONOMICS; POLITICAL science
- Publication
American Economic Review, 2003, Vol 93, Issue 1, p113
- ISSN
0002-8282
- Publication type
Article
- DOI
10.1257/000282803321455188