Three essays on war and the economy

This thesis consists of three main chapters that examine the interplay of war and the economy. They follow the brief introductory chapter 1.;Chapter 2 revisits the view that trade fosters peaceful relations among nations. Based upon a new data set covering the years 1900 to 1944, I first show that the track record of trade volumes in the four major European powers and the U.S. is decidedly mixed before and during World War I as well as World War II. Trade volumes rose in five out of the nine wartime cases for which data are available. Further, I show that in the case of Nazi Germany increased trade was not a hindrance to, but rather a consequence of impending conflict. These findings cast considerable doubt upon the validity of the peace-through-trade hypothesis.;Chapter 3 sets out to measure economic gains from conquering advanced industrial societies. I examine the spoils of German conquest during the Second World War in detail and weigh the revenues from occupation against the costs incurred during the conquest and occupation phases. In contrast to most of the earlier literature in political science, I find that conquest did not pay for Germany in an economic sense and discuss the implications of my finding for the study of conflict in repeated settings.;Chapter 4 examines the widespread practice of deliberate deception in the international realm and presents a theory of "dynamic deception" that helps predict when countries will try to understate their actual strength and when they are likely to overstate it. Concretely, I explain when and why a rising power will abruptly switch from understating its military and economic capabilities to overstating them and illustrate my theory using data on Germany's behavior in the interwar years. I find that German deception in the interwar years did influence both France and Great Britain in the way intended.