We construct a dynamic theory of civil conflict hinging on inter-ethnic trust and trade. The model economy is … beliefs on the average propensity to trade of the other group. Since conflict disrupts trade, the onset of a conflict signals … after each conflict episode. Third, "accidental" conflicts that do not reflect economic fundamentals can lead to a permanent …

We build a theoretical framework that allows for endogenous conflict behaviour (i.e., fighting efforts) and for … Hotelling fashion during peace, the presence of conflict creates incentives for rapacious extraction, as this lowers the stakes … or by government investment in weapons. The shadow of conflict can also make less efficient nationalized oil extraction …