Garfinkel, Michelle R; Skaperdas, Stergios; Syropoulos, … - LeBow College of Business, Drexel University - 2012
We augment the canonical neoclassical model of trade to allow for interstate disputes over land, oil, water, or other resources. Different trade regimes imply different costs of such disputes in terms of arming. Depending on world prices, free trade can intensify arming to such an extent that...