The gains of neutrality - The impact of war on trade and finance of non-belligerent countries

Do neutral countries attract trade and resources from belligerent countries during war periods, and if so, which are the effects on the neutral economies? In the literature, there is a consensus that the wars that followed after the Napoleonic Wars have disrupted the international economy. Apart from the loss of lives and physical capital, wars also carry indirect costs, in the form of lost foreign trade, distorted financial markets, costs of shifting the economy to a war footing, etc., which research suggests might be even larger than the direct costs of war. In these respects, wars have aggravated international economic growth and integration. Contrary to this view, however, there is empirical evidence at hand in the literature which shows that neutral countries could have benefitted from the changing political and economic conditions brought on by war, by being able to maintain old and develop new channels for international exchange during times when the exchange between belligerent countries diminished due to naval and economic warfare. By comparing the pattern of foreign trade, financial markets and institutional conditions in non-belligerent vis-á-vis belligerent countries between 1827–2000, using an updated gravity model framework to analyze bilateral trade and capital flows, and through times-series analysis of country shares of world trade, we hope to add to the international research on trade and economic integration.

Contact persons:

Peter Hedberg, Department of Economic History, Box 513, 751 20 Uppsala, Phone +46 18 471 7313. Email:


Seminars will take place in Ekonomikum, room K425, 1315-1500

29 August

Margrit Müller, Universität Zürich. "The impact of multinationalization on the firms, their home economy and the host countries. The case of Switzerland during the 20th century"

12 September

Amanda Scardamaglia, Swinburne Law School, Melbourne. Presentation of research project on  "Colonial trademarks".