In this paper, we propose a theoretical framework to investigate the impact of conflicts and wars on key macroeconomic aggregates and welfare. Using a panel data with 12 countries from 1875 onwards we first show that consumption drops more than output during conflicts, while the opposite is true...

We analyze the effects of large war episodes (world wars) on the macroeconomic dynamics of four advanced countries (France, Germany, the UK and the U.S.) using a structural small open economy model estimated with Bayesian techniques. Our dataset is taken from Piketty and Zucman (2014) and goes...