1. Home
  2. Studies
  3. The Impact of Intense and Escalating Conflicts on Economic Performance and on German Foreign Trade
IW-Trends No. 1 5. April 2018 Hubertus Bardt The Impact of Intense and Escalating Conflicts on Economic Performance and on German Foreign Trade

Be they vague threats to peace or full-scale wars, conflicts place a considerable burden on the economies affected. Companies are more reluctant to invest when the stable business environment necessary for investment is lacking. Countries that are particularly prone to conflict show, on average, significantly lower growth and investment rates than comparable emerging and developing countries.

Download PDF
The Impact of Intense and Escalating Conflicts on Economic Performance and on German Foreign Trade
IW-Trends No. 1 5. April 2018 Hubertus Bardt

The Impact of Intense and Escalating Conflicts on Economic Performance and on German Foreign Trade

IW-Trends

Hubertus Bardt German Economic Institute (IW) German Economic Institute (IW)

Be they vague threats to peace or full-scale wars, conflicts place a considerable burden on the economies affected. Companies are more reluctant to invest when the stable business environment necessary for investment is lacking. Countries that are particularly prone to conflict show, on average, significantly lower growth and investment rates than comparable emerging and developing countries.

Indeed, countries with acute and sustained crises, such as Yemen, Libya and Ukraine have shown significant declines in economic growth, investment propensity and foreign trade as hostilities have escalated. The significance of such conflicts for German foreign trade can be assessed by means of a new indicator computed from the intensity of the conflict in partner countries and their share of total trade. This conflict index has so far shown only minor fluctuations, and these have largely been caused by slight changes in the assessment of conflict in important partner countries. By contrast, the conflicts that have really escalated in recent years have had little effect on German foreign trade. However, should conflicts arise in larger partner countries or regions with international significance, this could rapidly change. The oil price shocks of the 1970s demonstrated only too clearly how quickly regional hostilities can impact on the global economy.

Download PDF
The Impact of Intense and Escalating Conflicts on Economic Performance and on German Foreign Trade
IW-Trends No. 1 5. April 2018 Hubertus Bardt

Hubertus Bardt: Auswirkungen intensiver und eskalierender Konflikte auf die Wirtschaftsleistung und den deutschen Außenhandel

IW-Trends

Hubertus Bardt German Economic Institute (IW) German Economic Institute (IW)

More about this topic

More about this topic

Read the article
Trade and Cooperation Between the EU and the Gulf States
IW-Report No. 21 22. July 2026 Simon Gerards Iglesias / Nicolas Reeves*

Trade and Cooperation Between the EU and the Gulf States

Driven especially by the policies of US President Donald Trump, rising global economic fragmentation and geopolitical disorder have lent renewed strategic importance to the prospective free trade agreement (FTA) between the European Union (EU) and the Gulf Cooperation Council (GCC).

Simon Gerards Iglesias / Nicolas Reeves* IW

Read the article
IW-Policy Paper No. 7 13. July 2026 Jürgen Matthes

Free and Fair Trade Club to build Middle Power Weight

This paper proposes that the EU should build a cooperation platform together with the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership).

Jürgen Matthes IW

More about this topic

Content element with id 9713