Standard exchange rate models perform poorly in out-of-sample forecasting when compared to the random walk model. We posit part of the poor performance of these models may be due to omission of political factors. We test this hypothesis by including political variables that capture...

Data from 152 countries from 1950 to 1992 are used to estimate the joint determination of external conflict, internal conflict, and the business cycle. Results show that the occurrence of a recession alone will significantly increase the probability of internal conflict, and when combined with...

We develop an economic model of terrorism. Groups undertake violent activities to change the status quo when they are unable to bring about drastic political change in the face of limited access to economic opportunity. Furthermore, these groups are more likely to resort to terrorist activity...

-super-1This paper presents an empirical analysis of what drives congressional legislation on terrorism during the period 1995 to 2010. We utilize and augment current methodology to compile and analyze data on sponsorship and cosponsorship of terrorism related data. Our results on the sources of...

Since 1995, growth in sub-Saharan Africa has averaged more than 5% per year reversing a two-decade decline of real income per capita. In this paper, we explore the extent to which the nascent growth is sustainable or not due to higher incidences of terrorism and commodity price declines. Our...

We investigate the empirical effect of violence, as compared to other trade impediments, on trade flows. Our analysis is based on a panel data set with annual observations on 177 countries from 1968 to 1999, which brings together information from the Rose data set, the <sc>iterate</sc> data set for...

We develop a model to explore the inter-relationships between conflict and economic activity. We construct a simple two-period model where consumption and investment decisions are made in the presence of governments who consider initiating diversionary conflict to raise their chances of...