Winter is Coming: Controlled Conflicts and the Oil-Price Geopolitical-Risk Premium
November 21, 2016 | Mahmoud A. El-Gamal

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Author(s)
Mahmoud A. El-Gamal
Baker Institute Rice Faculty Scholar | Chair in Islamic Economics, Finance and ManagementThis paper presents a simple dynamic growth model of investment, consumption, passive military spending, and active military spending for an oil-exporting country. It argues that under conditions of significant geopolitical strife, a country might engage in a military conflict of limited scope and extent to drive up oil prices and revenues.