Truly honored to present my NBER working paper on Bilateral Conflict Risk and Trade during a research webinar of the Webinaire d’Economie Politique Francophone series on Friday 18 December 2026. I am extremely grateful to Sophie Panel for the invitation.
I will present the following research project: Joshua Aizenman, Rodolphe Desbordes, and Jamel Saadaoui, Bilateral Conflict Risk and Trade: Military Wars, Trade Wars, and Diplomatic Noise, NBER Working Paper 35077 (2026), https://doi.org/10.3386/w35077.
How damaging is a “trade war” relative to a “military war” or a “war of words”? Aggregate conflict indices cannot tell, treating missile strikes, joint military exercises, sanctions, and protests alike. Using large global event databases, we build a monthly calibrated directed bilateral indicator decomposing hostility into kinetic conflict, military posture, trade-context hostility, and baseline diplomacy. The panel documents a shift toward economic coercion. In a gravity model, only “military” and “trade” wars reduce international trade: the former is the sharper blow to any single relationship, the latter the larger aggregate loss, since it strikes the biggest trading partners. The directed structure reveals a retaliation channel. Geopolitical deterioration places $334 billion of bilateral trade at risk over the period 2015–2023, though much of it can plausibly be rerouted to alternative suppliers.
