Article ID Journal Published Year Pages File Type
5087328 Journal of Asian Economics 2014 12 Pages PDF
Abstract
We propose a theoretical and econometric framework to evaluate the impact of war on economic growth of a developing country with an open economy. The theoretical framework encompasses both the neoclassical and endogenous growth models. We test this framework using Sri Lankan data. The war had significant and negative effects both in the short and long-run (annual average of 9% of GDP). High returns from investment in physical capital did not translate in sizable positive externalities. Only short-run significant effects of openness on growth are found. Inconsistent politically driven policies towards openness are the likely reason.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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