Especially, the past decade has experienced a significant increase in the study of matters to do with conflict. The main observation conflict has on economic growth of the nation. Even though, conflict might result in poor economic performance, the inverse relationship is equally reliable. Therefore, this contradicts the findings. Furthermore, very little is recognized relating to the post-conflict recovery. Therefore, the aim of this paper is to conduct econometric evaluation for both. This study will be narrow down to Afghanistan’s conflict.
Drawing my conclusion form an economic hypothetical point of view, is that there is no agreement about the effect of conflict on the general economic performance. The neo-classical theory forecasts that the economy period takes minimal time. The alternative models claim that the catch-up period takes a longer period because the recovery rate of the human is slower. It is attributed to the country being trapped within a lower positioned equilibrium. The current evidence supports each side of the argument by providing the support.
A possible explanation of the two depends on the nature of the data in use. A use of data of data from various countries reveals that a number of factors that are necessary for determining the relationship will be unattended to. The rate of economic recuperation may be dependent on the kind of damage brought about by the conflict. However, it was dependant on two factors, whether the conflict was between countries that depend on their soldiers or within the country among factions of its community.
The use of micro-level statistics acts as a more reliable means reason being the initially unobservable aspects become observable. For the purpose of further clarification, more information is in the literature review section, detailing the effect of conflict on the economy.