We study the impact of nationalism and interstate frictions on international economic relations by analyzing market reaction to adverse shocks to Sino-Japanese relations in 2005 and 2010. Japanese companies with high China exposure suffer relative declines during each event window; a symmetric...

We propose a model of trade agreements in which contracting is costly, and as a consequence the optimal agreement may be incomplete. In spite of its simplicity, the model yields rich predictions on the structure of the optimal trade agreement and how this depends on the fundamentals of the...

How do foreign interests influence the policy determination process? What are the welfare implications of such foreign influence? In this paper we develop a model of foreign influence and apply it to the study of optimal tariffs. We develop a two-country voting model of electoral competition,...

What do trade negotiators negotiate about? There are two distinct theoretical approaches in the economics literature that offer an answer to this question: the terms-of-trade theory and the commitment theory. The terms-of-trade theory holds that trade agreements are useful to governments as a...

Are insurgents affected by new information about the United States' sensitivity to costs? Using data on attacks and variation in access to international news across Iraqi provinces, we identify an "emboldenment" effect by comparing the rate of insurgent attacks in areas with higher and lower...

Research on insurgency has been invigorated this past decade by better data, improved methods, and the urgency of understanding active engagements in Iraq and Afghanistan. This empiricists’ insurgency reinforces a classic literature on the essential role of civilians while challenging older...

A central question in intrastate conflicts is how insurgents are able to mobilize supporters to participate in violent and risky activities. A common explanation is that violence committed by counterinsurgent forces mobilizes certain segments of the population through a range of mechanisms. We...

Most aid spending by governments seeking to rebuild social and political order is based on an opportunity-cost theory of distracting potential recruits. The logic is that gainfully employed young men are less likely to participate in political violence, implying a positive correlation between...

This paper reviews the economics approach to conflict and national borders. The paper provides a summary of ideas and concepts from the economics literature on the size of nations; illustrates them within an analytical framework where populations engage in conflict over borders and resources,...

The overriding practical problem now is the tension between the global financial and market system and the national political and power structures. The main analytical short-coming lies in the failure to incorporate financial frictions, especially default, into our macro-economic models. Neither...