Conventional wisdom in economic history suggests that conflict between countries can be enormously disruptive of economic activity, especially international trade. Yet nothing is known empirically about these effects in large samples. We study the effects of war on bilateral trade for almost all...

This paper examines how violence in the Second Intifada influences Palestinian public opinion. Using micro data from a series of opinion polls linked to data on fatalities, we find that Israeli violence against Palestinians leads them to support more radical factions and more radical attitudes...

In this study we extend our previous work to examine the dynamic relationship between violence committed by Palestinian factions and that committed by Israel during the Second Intifada. We find a statistically significant relationship between Israeli fatalities claimed by groups associated with...

The economic theory of defense has traditionally described public safety as achieved through investments that deter adversaries. Deterrence is however ineffective, and preemptive defense is required, when a population of intended victims confronts supreme-value suicide terror. A moral dilemma...

This Paper seeks to analyse the nature of the terrorist threat following 9/11, and to explore the implications for defense R&D policy. First, it reviews the defining trends of defense R&D since the Cold War, and brings in pertinent empirical evidence: the US accumulated during the 1990s a...

What are the main causes of international terrorism? The lessons from the surge of academic research that followed 9/11 remain elusive. The careful investigation of the relative roles of economic and political conditions did little to change the fact that existing econometric estimates diverge...

This Paper analyses the effect of terror on the economy. Terror endangers life such that the value of the future relative to the present is reduced. Hence, due to a rise in terror activity, investment goes down, and in the long run income and consumption go down as well. Governments can offset...

This paper studies the dynamics of violence in the Palestinian-Israeli conflict since the outbreak of the Second (or 'Al-Aqsa') Intifada in September 2000, during which more than 3,300 Palestinians and more than 1,000 Israelis have been killed. The conflict has followed an uneven pattern, with...

Sales of arms are a significant component of international trade and raise a range of pressing policy issues. After a short review of the market, this paper provides a formal model of the trade which allows for competing, forward-looking suppliers whose welfare depends on both the economic...

The success or failure of the fight against tax havens is the outcome of a coordination game between a tax haven and its potential investors. Key determinants are the costly international pressure and the haven country's revenue pool. The latter is determined endogenously by the decisions of...